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Gold Remains Steady as Dollar Bounces after Oil Cut

Gold remained stable after sliding down slightly earlier on Friday as the greenback steadied due to losses in commodity currencies following  an extension of curbs by OPEC and other non-OPEC oil producers which left investors hoping for bigger cuts disappointed.

On the Comex Division of New York Mercantile, the gold future for June is 0.56% to $1,263.46 by 08:15 GMT. 

The June contract ended Thursday’s session 0.26% higher at $1,256.40 an ounce, after back-to-back losses, as a closely followed dollar gauge steadied.

Gold futures were likely to find support at $1,247.60, the lowest of May 24 and resistance at $1,263.80, the highest of May 23.

Gold spot is 28773.0, RS per 10 grams. The yellow metal has gained 0.6 percent so far this week.  

Oil prices tumbled 5% on Thursday, leading to the biggest daily percentage slide in crude prices since early March.

The U.S dollar index, which measures the greenback in the basket against other six major currencies, traded down 0.12% at 97.02.

Dollar-denominated assets such as gold are sensitive to moves in the dollar – A dip in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand.

A surge in the U.S dollar, however, processed on gold prices, which plunged to session lows, following increasing initial jobless claim data, boosting sentiment that the economy is continuing to show signs of a rebound in the second quarter.

Higher interest rates tend to be dollar-supportive, cutting demand for dollar-priced gold for investors using other currencies. Higher rates also weigh on demand for nonyielding gold in favor of yield-bearing investments.

In other precious metal tradings, silver futures rose 0.41% to $17.26 a troy ounce, while platinum futures  gained 0.25% to trade at $955.30.

Copper is down by  0.29% to $2.590, while natural gas added 0.37% to $3.287.

The managing director at gold dealer Gold, Silver Central in Singapore, Brian Lane, said that gold has just stepped on in the $1,245-$1,265 range over the past few sessions. He also added that “ Investors are looking for clues on the U.S Federal Reserve rate hikes and the U.K elections”.

"People are still waiting to see whether there is a clear direction for gold to move. Until then gold will continue to move sideways." 

Market analysts said that the broadening of shares by traders relevant to firm global trend primarily kept the gold prices higher in the future trades.

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