New York, US (BBN) – Gold prices edged lower in Asia on Thursday with demand prospects in the world’s top two importers, China and India, in focus with physical and exchange traded fund demand on hopes tax reform by New Delhi could cut the cost of bullion imports and as Chinese buyers seek a hedge for a weaker currency.
Gold for April delivery on the Comex division of the New York Mercantile Exchange eased 0.14 per cent to $1,251.90 a troy ounce. Copper futures on the Comex were last quoted at $2.676 a pound, reports
Overnight, gold prices traded modestly lower on Wednesday, weighed by a rise in the dollar, which continued to recover from multi-month lows, after the release of upbeat economic data.
Gold prices dipped to a session low of $1,246.50, as stronger than expected US home sales data supported the narrative of a stronger US economy, which pushed the dollar to session highs.
The US National Association of Realtors said its pending home sales increased by 5.5 per cent last month, which was far above economists’ forecast of a 2.4 per cent increase.
Meanwhile, British Prime Minister Theresa May triggered Article 50 on Wednesday, the legal process by which Britain will leave the EU.
Article 50 gives the leaving country two years to negotiate an exit deal and once it’s triggered, it can’t be stopped except by unanimous consent of all member states.
Elsewhere, investors mulled over comments from Federal Reserve officials, as Fed member Charles Evans said Wednesday, he has confidence that two total rate increases in 2017 seems “very safe”.
Federal Reserve Bank of Boston President Eric Rosengren took a somewhat bullish outlook on possible rate hikes, after he said the US central bank should be prepared to raise interest rates a total of four times in 2017 to prevent the US economy from overheating.
Gold is sensitive to moves in US interest rates, which lift the opportunity cost of holding non-yielding assets such as gold, while boosting the dollar in which it is priced.