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Gold hovers near 4M trough on upbeat risk-taking sentiment

Gold hovers near 4M trough on upbeat risk-taking sentiment

Mubasher: Gold traded near its lowest level in about four months on Wednesday, as the dollar strengthened after solid US housing figures, which allayed worries over an economic slowdown and stoked risk appetite, Reuters reported.

By 8:50 am GMT, US gold futures went up 0.18% to $1,275.50 per ounce, while spot gold ticked up 0.08% to $1,273.45 per ounce, after touching $1,265.90 per ounce in the prior session, the lowest level since the end of last year, and nearly 6% far away from its peak of $1,346.73 per ounce attained last February.

“The major factor that is pressuring gold prices is the strength of the dollar, which is also pressuring physical demand,” Hong Kong-based Wing Fung Precious Metals dealing head Peter Fung was quoted by the news agency.

The dollar approached its highest peak in 22 months after US new home sales in the US surged last March, logging their best growth in one year and a half.

At 8:50 am GMT, the index gauging the greenback against a basket of six major peers inched down 0.01% to 97.6310.

In addition, the US economy is set to have grown at rate beyond analysts’ estimated 2.1% in the first quarter of this year, after the Federal Reserve Bank of Atlanta’s GDPNow model predicted a 2.8% expansion rate.

Should this growth rate be seen, global economic sentiment would be boosted, lending support to the greenback, analysts told Reuters.

The yellow metal also fell under pressure by a recent rally in global equity markets and supportive policy, fuelling appetite for risky assets.

Both benchmarks Nasdaq and S&P 500 indices hit record closing peaks in the prior session.

“We continue to see a slow grind in gold for the moment, as there is very little that can make the case for a short-term upside swing,” a note by INTL FCStone analyst Edward Meir was quoted by Reuters.