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Gold falls 6th time 7 sessions amid $ strength

  • SOURCE: | qwesa2big
  • downloadGold futures declined for a sixth time in seven sessions as a strengthening dollar eroded the metal’s appeal as an alternative asset.

    The greenback gained 0.2 percent against a basket of 10 currencies, set for a second straight advance. Goldman Sachs Group Inc. is holding fast to its bullish-dollar stance, even as the Federal Reserve takes a more cautious approach to tightening monetary policy, signaling two interest-rate increases this year.

    Bullion is still the best-performing major commodity this year, with a gain of 17 percent, after turbulent financial markets and weakening economies boosted demand for the metal as a haven. Investors are taking a breather as they asses the outlook, with gold posting two straight weekly losses amid signs of stabilisation in equity markets. Traders priced in a 44 percent expectation that the Fed will raise rates by June, up from 22 percent a month ago.

    “While the rest of the world’s central banks are lowering rates, we’re still talking about raising, and that’s going to probably keep the dollar up,” George Gero, a managing director at RBC Wealth Management in New York, said in a telephone interview. “Any closer to a rate rise in June is one impetus that traders see for doing some preventive selling or shorting of gold.”

    Gold futures for April delivery slid 0.8 percent to settle at $1,244.20 an ounce at 1:41 p.m. on the Comex in New York. Prices fell 0.4 percent last week.

    Holdings in exchange-traded funds increased 21.4 metric tons to 1,763.1 tons, the biggest increase since Feb. 22, according to data compiled by Bloomberg as of Friday. Investors have kept increasing their position over the past few weeks, amassing the most in about two years, even though prices are up less than 1 percent in March.


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