Gold prices edge up

Gold rose on Friday as forecast-beating euro zone inflation data boosted the euro versus the dollar, while global stock markets retreated from Wednesday’s record highs on concerns about global trade.
The euro rose toward 5-1/2 month highs as the data was seen as keeping the pressure on the European Central Bank (ECB) to start dialing back stimulus measures as early as June. That lifted gold, which is priced in the US currency. Spot gold was up 0.3 percent at $1,266.81 an ounce by 1400 GMT, while US gold futures for June delivery were up $2.30 at $1,268.20. “At this point, $1,300 looks like it is more appealing for gold than $1,100,” ING analyst Hamza Khan said.
“A bit more weakness in the dollar, combined with more movements around North Korea, could be the situation that sets the stage for higher gold prices.” Jitters over tensions in the Korean peninsula and the threat of a strong showing from an anti-EU candidate in the French elections helped drive gold higher last week.
However, it is now on track for its biggest weekly drop, as fading concerns over Korea and a strong showing in the first round of the French vote from centrist candidate Emmanuel Macron sharpened risk appetite, pressuring gold. Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Shares, fell 0.1 percent to 853.36 tons on Thursday.
Holdings are down by more than 6 tons since Tuesday. Spot gold was down 1.3 percent from last Friday’s level, its biggest weekly loss since early March, though its descent has slowed.
“Most of the correction should be done by now,” Commerzbank analyst Daniel Briesemann said. “We see good support at this level. There are a lot of uncertainties remaining.”
“The high-risk appetite at the beginning of the week seems to have abated, at least for now. This has definitely helped support the gold price, and the dollar is supportive as well.”
Banks remain stubbornly cautious on gold’s price prospects this year in spite of a strong first-quarter performance, a Reuters poll showed on Friday, as the prospect of higher interest rates takes the shine off the metal.

Source: Arab News