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Gold prices slide lower on stronger dollar

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June 9th, 2017
Gold prices slid lower on Friday, as the dollar regained some ground after Thursday’s three major risk events, although markets were still awaiting the final results of the U.K. election.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery were down 0.31% at $1,275.51.

The August contract ended Thursday’s session 1.06% lower at $1,279.50 an ounce.

Futures were likely to find support at $1,261.30, the low of June 2 and resistance at $1,291.50, Thursday’s high.

The greenback gained ground after former FBI director James Comey in testimony on Thursday accused President Donald Trump of firing him to try to undermine his investigation into possible collusion by the Trump campaign team with Russia's alleged efforts to influence the 2016 presidential election.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.29% at 97.22, just off a one-and-a-half week high of 97.36.

A stronger U.S. dollar usually weighs on gold, as it weakens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.

Markets were also still digesting the European Central Bank’s decision on Thursday to cut its forecast for inflation this year to 1.5%, down from 1.7% in March.

The forecast came after the central bank left interest rates unchanged in a widely expected move.

But gold’s losses were limited after U.K. Prime Minister Theresa May's Conservative Party lost its parliamentary majority in Thursday’s general election, potentially disrupting Brexit negotiations.

May faced calls to leave the government on Friday after the election left no single party with a clear claim to power just 10 days ahead of the start of Brexit negotiations.

Elsewhere in metals trading, silver futures for July delivery declined 0.51% to $17.325 a troy ounce, while copper futures for July delivery was little changed at $2.608 a pound.




See Also: Gold News Blog,  Gold, Copper, Silver, Platinum
Gold futures gained in New York as concern about slowing growth drove equities lower and boosted demand for the metal as an alternative investment.