Gold prices hold earlier losses on firmer Asian shares

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Gold prices held near three-week lows early Monday on firmer Asian stocks and growing expectations that the U.S. Federal Reserve will hike interest rates as early as June.

Gold prices hold earlier losses on firmer Asian shares

Spot gold edged up 0.1 percent to $1,252.92 per ounce by 0041 GMT, hovering near three-week lows after declining for three days in a row. The metal fell 1.7 percent last week, marking its biggest weekly decline in two months. U.S. gold futures were up 0.1 percent to $1,253.70 early on Friday but headed for a 1.2-percent weekly drop.

Asian shares rose on Monday after a solid session on Wall Street as investors bet that the U.S. Federal Reserve was on track to raise rates sooner rather than later. The dollar was slightly lower against a basket of major currencies on Monday, but remained within striking distance of a two-month peak.

U.S. home resales rose more than expected in April, suggesting the economy continues to gather pace during the second quarter. Conditions for a rate increase by the Federal Reserve are “on the verge of broadly being met,” Eric Rosengren, president of the Federal Reserve Bank of Boston, told the Financial Times.

Hedge funds and money managers raised their bullish bets in COMEX gold futures and options in the week to May 17, data showed on Friday. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 1.04 percent to 869.26 tons on Friday, the largest since November 2013.

The United States issued a fresh warning to Japan against intervening in currency markets on Saturday as the two countries’ differences over foreign exchange overshadowed a Group of 7 finance leaders’ gathering in the Asian nation.

Source: Reuters

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