Gold prices inched up on Monday as declining equities lent support to the yellow metal even though robust US jobs data potentially increased the chances of more interest rate hikes this year. Spot gold was up 0.1 percent at $1,334.23 per ounce by 0817 GMT, after declining 1.2 percent on Friday in its biggest one-day fall since December 7, 2017. The metal posted its biggest weekly drop since the week ended December 8, 2017. US gold futures were steady at $1,337 per ounce.
"A better-than-expected Chinese Caxin services PMI number pushed the gold price lower (early in the session) ... While the equity markets rout deepens, we expect the money flow to favour the gold price," said Naeem Aslam, chief market analyst at Think Markets. China's services sector got off to a flying start in 2018, expanding at its fastest pace in almost six years as new orders surged and companies rushed to hire more staff, a private survey showed on Monday.
"We have a bearish outlook for gold ... yield-chasing behaviour and a rosy economic outlook should pressure the yellow metal lower," said OCBC analyst Barnabas Gan. "The higher interest rate environment will actually fuel further risk-taking and is not good for gold." Meanwhile, hedge funds and money managers raised their net long position in COMEX gold contracts in the week to January 30 to their highest level since late-September, US Commodity Futures Trading Commission (CFTC) data showed on Friday.
Comments
Comments are closed.