Gold flat amid rising U.S. protectionism fears

Reuters  Mike Blake

Gold prices held steady on Monday, as the US dollar mildly weakened after broadly strengthening thanks to Friday's upbeat USA nonfarm payrolls report.

An ingot of 99.99 percent pure gold is cast at the Krastsvetmet non-ferrous metals plant, one of the world's largest producers in the precious metals industry, in the Siberian city of Krasnoyarsk, Russia September 22, 2017.

Spot gold was down 0.5 per cent at $1,316.81 an ounce at 1235 GMT, while U.S. gold futures for April delivery were 0.5pc lower at $1,317.30 an ounce.

On Tuesday, President Donald Trump fired Tillerson after a series of public rifts over policy on North Korea, Russia and Iran, replacing his chief diplomat with loyalist CIA Director Mike Pompeo.

Investors have switched to become more risk-averse following the unexpected news of Mr Tillerson's dismissal and the appointment of Mr Pompeo, said OCBC analyst Barnabas Gan. A weaker dollar makes gold less expensive for holders of foreign currency. "While a March hike is fully priced in, traders usually get a bit anxious awaiting the Fed statement and key forward guidance", said Stephen Innes, APAC trading head at OANDA.

Asian shares eased on Wednesday amid fears of rising USA protectionism.

Gold fell on Monday as the previous session's upbeat USA payrolls data sparked a fresh rally in stock markets and shored up expectations that the Federal Reserve would press ahead with further interest rate hikes this year.

The core consumer-price index, a gauge of costs that excludes food and energy products, increased by 0.2% month-on-month in February and 1.8% year-on-year.

Technical Fibonacci support for gold was at US$1,317.20 an ounce with resistance at US$1,336.30, said analysts at ScotiaMocatta in a note.

Elsewhere on the Comex, silver futures fell 0.26% to $16.57 a troy ounce.

Platinum was flat at US$960.60 an ounce after touching US$973.20, a one-week high, and palladium dropped 0.2 per cent to US$988.70, reaching a near two-week high earlier at US$1006.30.

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