Gold bounces off 4-month low as dollar drops after Fed minutes
MANILA – Gold climbed above four-month lows on Thursday as the dollar softened after minutes from the Federal Reserve’s last meeting showed the central bank needed to see more signs of a strengthening U.S. economy before raising interest rates.
Gold pulled out of a tighter trading range during the Asian morning session after the dollar weakened as investors kept an eye on stabilising Chinese stocks and progress in Greece’s debt saga.
Spot gold was up 0.6 percent at $1,164.30 an ounce by 0616 GMT, above Wednesday’s low of $1,146.75, the weakest since March 18.
Chinese stocks stabilised after the securities regulator banned shareholders with stakes of more than 5 percent from selling shares for the next six months in a bid to halt a plunge in stock prices that is starting to roil global financial markets.
“What’s happening in China would be a drag on gold prices because you have so many Chinese getting their fingers burned at this stage, so they simply have no more funds or money left to buy gold,” said Howie Lee, an analyst at Phillip Futures in Singapore.
Gold typically benefits from political and economic uncertainty as investors seek safe-haven assets, but the price of the metal has been largely rangebound for most of this year.
Lee said he sees immediate support for gold around $1,145, a breach of which could mean a drop towards $1,100.
U.S. gold for August delivery was little changed at $1,163.40 an ounce.
The minutes from the Fed’s June 16-17 meeting showed how the central bank continues to grapple with its plan to raise rates later this year, in the wake of mixed economic data domestically and market turmoil gathering steam abroad. – Reuters