Gold edges lower even as market awaits rate hike cues

Posted July 12, 2017

Traders may stick to the sidelines ahead of Federal Reserve Chair Janet Yellen's semiannual testimony before Congress. PepsiCo served up its results early Tuesday.

International Container Terminal Services was among the biggest gainers on the index, climbing as much as 2.6 percent, after signing an agreement with a dredging company to deepen the Congo River in Africa, a move that would realise cost savings for the terminal operator from 2018. Energy stocks closed mixed even as oil held gains above USD44 a barrel.

Department store JC Penney dipped 0.2 per cent as it announced chief financial officer Edward Record was stepping down. The South African rand ZAR= , Turkish lira TRY= and Russian Federation rouble RUB= all dropped around 1 percent as some unusually concentrated selling resumed to emerging markets too.

BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.36 percent from 2.38 percent late Monday.

The Canadian dollar rose against its USA counterpart, trading at C$1.2922 compared with C$1.2891 late Monday in NY. Bank of America declined 37 cents, or 1.5 percent, to $24.52. Britain's FTSE 100 slid 0.5 percent. It added 17 cents to settle at $44.40 a barrel on Monday.

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We are maintaining our prudent view on gold, believing that it will probably remain rangebound, between Dollars 1,100 and USD 1,300, but we are not ruling out the possibility that gold could be boosted by a variety of factors; chief among them are the continuing uncertainties surrounding the Trump administration's ability to deliver on its promised pro-growth policies, the recent increase in geopolitical tensions in the Gulf region (Qatar), and the repeated North Korean missile threats.

MARKETS OVERSEAS: In Europe, Germany's DAX lost 0.1 percent, while France's CAC40 fell 0.5 percent. Hong Kong's Hang Seng added 1.5 percent, while the Kospi in South Korea climbed 0.6 percent.

However, while it pushed up against the yen, it has struggled to break out, despite the widening gap between USA and Japanese monetary policy.

On Monday, financial markets around the world rallied and the US dollar touched a high of two-months versus the yen as the most recent jobs data from the USA gave investors more confidence in the strength of the USA economy.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$11.13 billion (US$364 million)-worth of shares on the main board, picking up large-cap electronics stocks, which sent the weighted index up 1.22 percent. The euro slipped to $1.1395 from $1.1400.