Mubasher: Gold prices declined on Thursday as the dollar reclaimed more ground and tensions over Brexit eased.
However, the yellow metal stood near a two-week peak seen in the previous session as lukewarm US inflation figures reinforcing expectations that the Federal Reserve would keep rates on hold.
By 9:15 am GMT, spot gold declined 0.56% to 1,301.81 per ounce, after hitting $1,311.07 per ounce, its highest level since 1 March, while US gold futures fell 0.57% to $1,301.90 per ounce.
The dollar was 0.1% higher against major currencies, after recording the biggest decline in two weeks in the prior session on soft US economic data. By 9:08 am GMT, the US dollar index edged up 0.05% to 96.6000.
US producer prices rose fractionally last month, resulting in the smallest annual gain in more than one year and a half, supporting views that the Federal Reserve would follow a patient approach in the future rate hikes.
“The dollar is playing a main role in driving gold prices down during Asia trading hours,” Singapore-based CMC Markets market analyst Margaret Yang told Thomson Reuters.
After extending its decline for the last four sessions, a little recovery in the greenback is seen today, Yang said.
So far this year, however, gold gained around 2% on expectations of the Fed’s patient plan on rate hikes, and mounting worries over global economic slowdown.
Moreover, gold’s safe-haven appeal declined as the Brexit uncertainty was fading away, after the UK parliament rejected leaving the European Union (EU) without a trade agreement. The lawmakers are widely expected to vote later in the day whether to push back the deadline for the UK’s departure currently due on 29 March.