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Gold Rises On Weaker Dollar; Platinum Group Metals Surge

Spot gold had risen 1.1 per cent to $1,354.44 an ounce by 0653 GMT, after gaining 0.4 per cent in the previous session

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Gold rose more than 1 per cent on Wednesday as the dollar fell on lower expectations for a US rate hike after weaker economic data, while platinum and palladium climbed to their highest in over a year.

Spot gold had risen 1.1 per cent to $1,354.44 an ounce by 0653 GMT, after gaining 0.4 per cent in the previous session.

US gold was up 1 per cent at $1,360.60 an ounce.

Spot palladium surged 7.4 per cent to $746.10 an ounce, the highest since June 2015. Platinum was up 2.4 per cent at $1,177.80, after rising to $1,182.20, its loftiest in over 16 months.

"The overall trend is positive in platinum group metals. Mine strikes and trade union problems in South Africa are supporting platinum prices and palladium is going with that," a Hong Kong-based precious metals trader said.

Platinum has risen over 32 per cent so far this year, closely followed by palladium, which has gone up about 30 per cent.

Gold, meanwhile, climbed after a report that US worker productivity fell for a third straight quarter in the spring this year.

"It's a noisy trading without trend. With a falling dollar, we would see short term rise in gold and silver prices," said Jiang Shu, chief analyst at Shandong Gold Group.

"The dollar is due for a rising trend and the gold rally, although it has some short term upside, can't last very long."

The dollar index, which gauges the greenback against a basket of six major currencies, fell 0.3 per cent to 95.891.

"There did not seem like many sell orders on the way up, which had been a feature of the past few days post nonfarm payrolls data, with all the interest focused on the buy side," MKS PAMP Group senior precious metals dealer Alex Thorndike said in a note.

The unexpected drop in US productivity may confirm the US Federal Reserve's fears that the economy may slip into a period of slow growth, reducing the central bank's willingness to raise interest rates.

Gold is highly sensitive to rising US interest rates, which lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which the metal is priced.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell for a second straight day on Tuesday. It slipped 0.12 per cent to 972.62 tonnes from Monday.

Spot silver was up 2 per cent at $20.26 an ounce.


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dollar gold price metals platinum south africa