Wednesday, August 20, 2014
Gold was stuck firmly below
$1,300 an ounce on Wednesday after a three-day losing streak, as
strong U.S. housing data bolstered stock markets and dimmed
bullion's appeal as a safe haven.
While keeping an eye on mounting geopolitical tensions,
investors were also awaiting minutes of the Federal Reserve's
July meeting for clues about the U.S. central bank's monetary
Spot gold was little changed at $1,295.44 an ounce by
0643 GMT, after dropping 1.3 percent in the last three sessions.
U.S. gold was steady at $1,297.
"Robust housing reports out of the United States were
important, as the stronger numbers should dispel concern that
the sector is starting to slow, as was the conventional view for
the past few weeks," said INTL FCStone analyst Edward Meir.
The data may leave the room open for an uptick in rates and
strong dollar, both of which should be bearish for gold over the
short term, Meir said.
U.S. housing starts surged to an eight-month high in July,
suggesting the nation's housing market recovery was back on
track after stalling in the second half of last year.
Investors are keenly watching U.S. economic data to gauge
the Fed's outlook on interest rates. Higher rates would dim the
appeal on non-interest bearing assets such as gold.
Among other precious metals, platinum was holding up
on Wednesday after a seven-day losing streak though it continued
to trade near a two-month low.
Silver was also near a two-month low, while palladium
was holding just below a 13-year high.
Geopolitical tensions continued to support gold by keeping
losses in check. SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, said its holdings rose 1.5
tonnes to 799.19 tonnes on Tuesday.
A gun battle broke out in the centre of the rebel-held
Ukrainian city of Donetsk and residents ran for cover from
artillery fire on Tuesday, taking a government military
offensive into the heart of the retreating pro-Moscow separatist
A ceasefire in the Gaza Strip collapsed on Tuesday, with
Palestinian militants firing dozens of rockets at Israel and
Israel launching air strikes.
Gold prices have risen 7.5 percent this year largely on
geopolitical tensions. Physical demand has been hit by the price
gain, with major buyers China and India staying on the sidelines
for lower prices.
That's all for now.