Stronger Dollar Erases Gold’s Gains

Stronger Dollar Erases Gold’s Gains

Gold prices and the corresponding SPDR Gold Trust (ETF) (NYSEARCA:GLD) dipped on Monday in premarket hours as a firmer U.S. Dollar (CURRENCY:USD) weighed on safe assets sentiment. Gold Futures for June’16 erased 1.19% of the previous sessions’ gains to $1,278.55.

Dollar performance will be key

According to gold analysts at MKS, the performance of the greenback after Friday’s US jobs report will dictate the movement of the precious metal. The research firm added that the chances of gold testing above $1,300 are brighter as the prospects of a interest rate hike in June may further recede.

In a report released on Friday, the Labor Department said that the U.S. economy added 160,000 jobs in April, which is the slowest in the last seven months while the unemployment rate remained unchanged at 5%. However, the report did indicate that the average hourly earnings grew 0.2% to 2.5% from 2.3% on year-on-year basis.

Apart from this, comments by a senior Federal Reserve official signalling that interest rates could be hiked sooner than expected also led to the weakness in the yellow metal. In other precious metals, Silver Futures for July delivery fell 0.78% to 17.390.

AngloGold keeps output forecasts static

Meanwhile, gold miner AngloGold Ashanti Limited (ADR) (NYSE:AU) maintained its full-year cost and output forecasts even as its earnings and production witnessed a dip during the first quarter. In the first three months to March 31, 2016, production at the company declined 11% to 861,000 ounces. However, this decline was partially offset by a 6.5% fall in all-in sustaining costs to $860 an ounce. The company’s adjusted earnings before interest, tax, depreciation and amortization dipped 6% to $378 million.

On the other side, Sandstorm Gold Ltd (NYSEMKT:SAND) reported its first-quarter results, where it sold 11,381 ounces of gold. The company’s revenue came in at $13.4 million as compared to $15.3 million in the first quarter of 2015. Net income of the company stood at $13.2 million versus $0.8 million in the previous year’s corresponding quarter.