June 30, 2017 / 2:33 PM / 2 years ago

PRECIOUS-Gold heads for 1st monthly loss in 2017 as rally stalls in 2nd qtr

    * Gold down 2 pct in June and 0.4 pct in Q2
    * Gold up nearly 8 pct in H1 after strong start to year
    * Silver down 9 pct in Q2 ; palladium up 6.1 pct
    * GRAPHIC-2017 asset returns: tmsnrt.rs/2jvdmXl

 (Updates prices; adds comment, byline, NEW YORK dateline)
    By Marcy Nicholson and Jan Harvey
    NEW YORK/LONDON, June 30 (Reuters) - Gold eased on Friday to
stay on track for its first monthly loss this year, as hints
from leading central banks that the era of easy money may be
coming to a close pushed bond yields higher, hurting the
non-interest bearing metal.
    While it is still up nearly 8 percent in the first half,
gold has stalled in the second quarter after a strong start to
the year, and is little changed from where it ended in March. 
    Spot gold        was down 0.3 percent at $1,241.41 an ounce
by 2:34 p.m. EDT (1834 GMT), while U.S. gold futures        for
August delivery settled down 0.3 percent at $1,242.30.
    The futures market will trade an abbreviated session on
Tuesday for the U.S. Independence Day holiday.             
    Spot prices have fallen around 2 percent so far in June, and
are on track to fall 0.6 percent in the second quarter. 
    Comments from the euro zone, British and Canadian central
banks this week indicated that quantitative easing programs in
place since the financial crisis may be being wound up, leading
to a gradual normalization of interest rates.              
    "The knee jerk reaction was that even as risk appetite got
smoked by lower equity prices, gold didn't do great either and
that is almost a direct reaction to higher yields essentially,"
said Bart Melek, head of commodity strategy for TD Securities in
Toronto.
    While the European Central Bank remains cautious on
tightening monetary policy, the trend is turning more towards
the hawkish side, said LBBW analyst Thorsten Proettel.
    "The most important thing for the gold market is that we
have monetary policy tightening in the United States, and so
with a further interest rate hike the gold price has gone down."
    Germany's benchmark bond yield recorded its biggest weekly
jump since December 2015 as investors appeared to position for
an end to the era of ultra-easy monetary policy.          
    U.S. Treasury yields rose for a fourth straight day as
inflation data was not seen as weak enough to delay the Federal
Reserve's expected path on interest rate hikes.      
    Among other precious metals, silver        was up 0.3
percent at $16.63 an ounce. Silver has seen the biggest fall
among major precious metals this quarter, down nearly 9 percent,
while palladium        is the best performer, up 6.1 percent. 
    Palladium was down 0.5 percent at $842.93 an ounce on
Friday, while platinum        was down 0.05 percent at $919.50. 
   

    
 (Additional reporting by Vijaykumar Vedala and Nithin Prasad in
Bengaluru; Editing by Mark Potter and Richard Chang)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below