Tuesday 25 July 2017

Euro pullback takes shine off precious metal

GOLD was little changed in Europe at the end of last week after the European Central Bank held interest rates at 1pc as expected.

Spot gold was bid at $1,138.55 an ounce. Gold rose as high as $1,144.60 an ounce on Wednesday, its highest level since January 15, as dollar weakness added to fears over the stability of the eurozone financial system to prompt buying of gold.

But the single currency's retreat from highs against the dollar has been putting the metal under pressure.

"The pullback in the euro/dollar is taking a little wind out of gold's sails," said Societe Generale analyst David Wilson.

"There is still nervousness over the euro area, particularly with strikes in Portugal over austerity plans," he added.

Fears over the outlook for Portugal, Italy, Greece and Spain and Ireland have helped push the single currency down nearly 5pc versus the dollar so far this year.

Gold tends to track crude prices, as it can be bought as a hedge against oil-led inflation. The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,115.511 tonnes as of March 3, up from 1,111.556 tonnes in the previous business day.

Irish Independent

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