GOLD extended a decline yesterday as the dollar rose after Donald Trump downplayed his clash with Federal Reserve Chairman Jerome Powell, easing concerns around the central bank’s independence, reports Bloomberg.
Trump maintained on Thursday that there was “no tension” with the Fed chief and indicated that problems with renovations of the Fed headquarters probably weren’t reason enough to fire the central bank head. A stronger greenback makes gold more expensive for many buyers.
Gold is up more than 27 per cent this year, as uncertainty around Trump’s aggressive attempts to reshape global trade and conflicts in Ukraine and the Middle East sparked a flight into havens. Still, the precious metal has been trading within a tight range over the past few months after spiking to an all-time high above $3,500 an ounce in April, with investors growing more confident about risk assets in recent weeks following progress in US trade negotiations.
“Gold is looking for direction,” Commerzbank analysts including Barbara Lambrecht said in a note. “The trends in investment demand suggest that the gold price has peaked for the time being, especially as no interest rate cut is expected in the US” at the Fed’s July meeting next week.
She noted that the pace of net inflows of gold exchange-traded funds – a key driver in bullion’s price gains this year – slowed in the second quarter.
Total gold ETFs holdings rose 2.9pc during the April-June period, compared with a 6.2pc increase in the first quarter, according to data compiled by Bloomberg.
Spot gold was down 0.9pc to $3,337.12 an ounce at 10.36am in New York, with prices 0.4pc lower for the week. The Bloomberg Dollar Spot Index added 0.3pc. Silver, platinum and palladium all fell.
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