Gold Stops Retreat Awaits Geopolitical Climate

Gold held above a three-day low in New York as investors weighed tension over the downing of a passenger aircraft in Ukraine against the outlook for an improving U.S. economy.

The dollar was little changed near a one-month high against 10 major currencies after data yesterday that showed U.S. home sales climbed to an eight-month high and before a report tomorrow that may show slowing European manufacturing. Bullion, which dropped 0.6 percent yesterday, slid 28 percent last year on expectations for reduced U.S. stimulus.

Prices have rebounded 8.9 percent this year partly as tensions in Ukraine and the Middle East spurred haven demand. The European Union yesterday threatened to restrict Russia’s access to capital markets and sensitive energy and defense technologies unless President Vladimir Putin expedites a probe into the downing of the Malaysian passenger jet.

“Without the current geopolitical risks, gold would not be able to hold on to prices above $1,300,” UBS AG analysts wrote in a report today. “Such risks are holding potential shorts back. Gold reacted to U.S. economic data releases and subsequent movements in the foreign-exchange market, but follow-through was lacking. The overall muted tone remained in place.”

Gold for December delivery added 0.1 percent to $1,309.60 an ounce by 7:40 a.m. on the Comex in New York. Prices fell to $1,304.20 yesterday, the lowest since July 17. Bullion for immediate delivery rose 0.1 percent to $1,307.54 in London, according to Bloomberg generic pricing.

via Bloomberg

Content 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 Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.