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Gold steady as weaker US dollar counters easing geopolitical worries

17-April-2018

COMEX gold trades in a narrow range near $1350/oz amid mixed cues. Easing market reaction to geopolitical issues is countered by weakness in US dollar and mixed US and Chinese economic data.

The United States, France and Britain launched 105 missiles on Saturday, targeting three chemical weapons facilities in Syria in retaliation for a suspected poison gas attack in Douma on April 7.

Market reaction was however subdued as it was seen as one off event and was targeted only towards Syrian chemical weapon facilities. Russia had warned of major consequences but has not taken any action so far. US had warned of sanctions on Russia’s for its support for Syria but have deferred a decision on the same.

However, supporting gold price is weakness in US dollar. The US dollar index trades near 89.4 levels after a 0.4% decline yesterday. The currency weakened after President Donald Trump accused Russia and China of devaluing their currencies, contradicting an assessment from the Treasury Department. Just last Friday, the Treasury Department said that no major trading partner, including China, manipulated their currencies.

Mixed US and Chinese economic data also supported gold prices. China's gross domestic product rose 6.8% from a year earlier in the first quarter in line with expectations. Industrial production rose 6% in March as against forecast of 6.3% growth.

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