Gold Hits Near 2 Week High After U.S. Data

US crude hit a near two-week high the

previous day on news of inventory declines at a key storage hub and from expectations that top OPEC producers could extend cooperation beyond 2018.

Trading in Chinese financial markets will resume on Thursday after being shut for the past week for the Lunar New Year.

The U.S. dollar rose against other major

currencies on Tuesday as investors were awaiting the large U.S. government debt auctions this week.

Spot gold had slipped by 0.1 percent to $1,328.65 an ounce at 0130 GMT and was down for a fourth straight session.

Australian stocks were almost flat and South Korea's KOSPI gained 0.55 percent. The two-year bill yield touched 2.282 percent, the highest since September 2008.

The dollar index, which measures the greenback against a basket of

currencies, was up 0.03 percent at 89.742.

The U.S. Treasury Department on Tuesday sold record amounts of three-month and six-month bills at the highest interest rates for these maturities at auctions in more than nine years, Treasury data showed. It hit a three-year low of 88.253 on February 16.

Increased government borrowing has applied steady upward pressure on Treasury yields.

Any positive impetus from rising US interest rates has been offset by a barrage of bearish factors, including worries that the USA government is pursuing a weak dollar strategy.

Confidence in the dollar has also been shaken by mounting worries over the U.S. budget deficit. "There are some really well-entrenched trends that continue to work against the US dollar".

But the greenback managed to find bids once the dust began to settle after last week's tumble. The dollar's upward march against the yen would gain momentum if hopes for an acceleration in the US central bank's interest rate hikes grow without battering the USA equity market, the official said.

The dollar continued rising toward noon on the back of buying reflecting firmer Tokyo stocks and purchases from Japanese importers.

"Market instability is likely to persist until the Fed's policy meeting in March", said Hiroaki Kuramochi, chief market analyst at Saxo Bank Securities in Tokyo.

The dollar extended an overnight surge and gained 0.4 per cent to 107.770 yen. United States gold futures were down 1% at $1,342.90 per ounce, posting its biggest one-day fall in almost two weeks.

The stronger dollar weighed on commodities, with Brent crude futures losing 0.6 per cent to $US64.88 per barrel and U.S. crude oil futures slipping 0.7 per cent to $US61.37 per barrel.

US crude hit a near two-week high the

previous day on news of inventory declines at a key storage hub and from expectations that top OPEC producers could extend cooperation beyond 2018.

Spot gold may drop to $1,316 per ounce as it has broken a support at $1,335, according to

Reuters technical analyst Wang Tao.

Sumber

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