The price of gold rose slightly on Thursday, lifted off an early six-month low as the US dollar fell from an 11-month high, with traders saying they heard Russia had bid for bullion. Spot gold was up 0.2 percent at $1,265.4 an ounce at 1501 GMT but off a low of $1,260.84, its weakest level since December 19. US gold futures for August delivery settled down $4, or 0.3 percent, at $1,270.50 per ounce.
"Gold started to pick up as the dollar weakened," said RJO Futures' Dan Pavilonis. The dollar fell off an 11-month high against a basket of major currencies as the Philadelphia Federal Reserve's gauge of US Mid-Atlantic business activity fell to a near 1-1/2 year low, spurring profit-taking on the greenback.
Higher interest rates would encourage investors to sell gold, which earns nothing and costs money to store and insure. A rising US currency also sends a sell gold signal to funds that use numerical models because a strong dollar makes commodities more expensive for holders of other currencies.
Even so, traders said they have seen gold purchases come from Russia. "We've been hearing in the news over the last couple weeks that Russia has been buying more gold and selling US Treasuries," Pavilonis added. Meanwhile, holdings of US-based gold-backed exchange traded funds have fallen since April.
Silver gained 0.4 percent at $16.33 an ounce, earlier falling to $16.16, its lowest since May 2. Palladium lost 1.5 percent at $950, earlier sinking to $948.50, a seven-week low. Platinum slipped 0.1 percent at $866.10 per ounce.
Comments
Comments are closed.