Gold up, USA dollar dips on inflation data

Lloyd Doyle
March 15, 2019

Spot gold was down 0.4 percent at $1,303.83 per ounce as of 0416 GMT, after touching its highest since March 1 at $1,311.07 on March 13.

Gold hit almost a two-week high on Wednesday as tepid U.S. economic data reinforced views the Federal Reserve would be patient on monetary policy, with bullion's appeal also bolstered by uncertainty over a Brexit deal ahead of a key vote.

Silver slipped for the first time in five sessions and was down 1.4 percent at $15.23 per ounce.

United States retail sales rose 0.2 in January, surprising economists who had expected an unchanged result.

USA producer prices barely rose last month, resulting in the smallest annual increase in more than 1-1/2 years, reinforcing views that the Federal Reserve would be patient on future rate hikes.

When the dollar goes down, gold futures will rise as gold, priced in the dollar, becomes less expensive for investors holding other currencies.

Gold is facing stiff resistance at the $US1,300 mark, having failed to significantly break above the key psychological ceiling, despite recent momentum on the back of the USA dollar's declines fuelled by weak USA jobs data and modest retail sales in January. Britain's parliament is due to vote at 1900 GMT on whether the country should leave the European Union on March 29 without a deal. On the technical front, "gold is now heading towards the next potential resistance around $1313, a former support level", said analyst Fawad Razaqzada.

Gold rose on Tuesday as the dollar weakened after the European Commission agreed to amendments to the UK's Brexit deal, although gains were limited as the agreement also buoyed sentiment for riskier assets.

"The possibility of a no-deal Brexit being passed had increased the likelihood of widespread buying in gold, and now that it has been rejected, I think some of that safe haven buying in gold is likely to fade", said Suki Cooper, precious metals analyst at Standard Chartered Bank.

Among other precious metals, palladium climbed 0.9 percent to $1,555.01 per ounce, while platinum rose 0.1 percent to $838.

United States gold futures were up 0.1 percent at $1,292.90 an ounce.

Other reports by Iphone Fresh

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