Gold slips to four-week lows

Xavier Trudeau
Juin 19, 2017

PLATTSBURG, NY U.S. inflation is a bit low but should rise alongside wages as the labor market continues to improve, allowing the Federal Reserve to continue gradually tightening U.S. monetary policy, New York Fed President William Dudley said on Monday.

Spot gold was down 0.1 per cent at $1,252.21 per ounce, as of 0127 GMT. Mr Dudley, a close ally of Fed Chair Janet Yellen, is due to take part in a roundtable with local business leaders in Plattsburgh, New York. United States gold futures for August delivery fell 0.2 per cent to $1,254 per ounce.

Gold Reserve Inc had said on Friday it received $40 million from the government of Venezuela as part of a $1.03-billion settlement arbitrated by the World Bank for the termination of its Las Brisas gold concession in 2009.

Investors are focusing on the United Kingdom government's stance in the talks, after the ruling Conservative party's setback in this month's election deepened uncertainty over both Prime Minister Theresa May's Brexit plans and her political future.

British Prime Minister Theresa May failing to win a parliamentary election earlier in June has, alongside Brexit negotiations starting on Monday in Brussels, fuelled political uncertainty.

On the technical front, support for gold kicked in at $1,248, near the 100-day moving average, and resistance sat at $1,260, near the 55-day moving average, traders said. Earlier in June the metal used to make autocatalysts for petrol-fuelled cars hit a 16-year high at $914.70/oz as the market fretted about shortages in the near term.

But analysts say palladium's gains of more than 25 percent so far this year may not be justified given slowing auto sales.

"We are pretty close to full employment".

"There are some concerning signals from the two largest gasoline (palladium) auto markets, the US and China", ICBC Standard Bank analysts said in a note. "There are a several reasons why, namely credit, a maturing business cycle, and reduced incentives".

Asia gold demand ticked up this week as global prices came off seven-month highs, while Indian buyers stayed on the sidelines waiting for further price drops in the absence of fresh triggers to stoke purchases.

Silver gained 0.3 percent to $16.63 an ounce and platinum slid 0.4 percent to $920.9 an ounce.

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