Gold futures traded below a two-month high as investors weighed the outlook for U.S. borrowing costs to remain low and tension in Iraq against signs of weaker physical demand. Platinum and palladium declined.
Gold capped a third successive weekly advance last week after the Federal Reserve said it will keep interest rates at almost zero for a considerable time. The metal’s 12-year bull run ended in 2013 on expectations that the Fed would scale back stimulus as the economy strengthened.
Bullion is set for its first back-to-back quarterly gain since 2011, in part as escalating violence in Iraq and tension between Ukraine and Russia boosted haven demand. Militants in Iraq seized more territory and U.S. President Barack Obama warned that the crisis may spill over into other countries. There’s still “little physical interest,” Australia & New Zealand Banking Group Ltd. wrote in a report today.
The metal gained “on the back of rising tension in Iraq, dovish remarks by Fed Chair Janet Yellen” and technical-related buying, Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., said in a report today. Demand from China is “unlikely to pick up any time soon. We expect gold to face strong hurdles in sustaining these recent gains.”
via Bloomberg
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.