Gold slips to 1-year low as US dollar firms

“Gold market is just following the US dollar, the dollar is strong so it’s pushing the market down,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. (Reuters)
Updated 19 July 2018
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Gold slips to 1-year low as US dollar firms

BENGALURU: Gold extended falls to a one-year low on Thursday as the US dollar firmed after Federal Reserve Chairman Jerome Powell asserted the need for further interest rate hikes amid a strong economy.
Spot gold was down 0.2 percent at $1,223.56 an ounce at 0703 GMT.
The yellow metal slipped to its lowest since July last year at $1,220.41 an ounce earlier in the session. US gold futures for August delivery were 0.4 percent lower at $1,223.20 an ounce.
“Gold market is just following the US dollar, the dollar is strong so it’s pushing the market down,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
“The economy is still good and interest rate still up, so that’s good for the US dollar and negative for gold for the time being.” The dollar held firm against its peers, supported by bullish comments from Powell, which affirmed expectations for at least two more interest rate hikes this year.
“Rallies continue to be well sold and it is difficult to see a break toward $1,236 — $1,240 (in gold) with the current dollar strength,” MKS PAMP Group said in a note.
Fed’s Powell in a closely watched two-day congressional testimony, said he believed the United States was on course for years more of steady growth, and carefully played down the risks to the US economy of an escalating trade conflict.
However, manufacturers in every one of the Federal Reserve’s 12 districts worried about the impact of tariffs, a Federal Reserve report said on Wednesday, even as the US economy continued to expand at a moderate to modest pace.
US President Donald Trump said on Wednesday the United States may hammer out a trade deal with Mexico, and then do a separate one with Canada later, sowing fresh doubts about the future of the North American Free Trade Agreement.
Spot gold has found a support zone of $1,220-$1,226 per ounce.
It may hover above this zone for one more day or bounce toward a resistance at $1,237, Reuters technical analyst Wang Tao said.
Among other precious metals, silver was down 0.8 percent at $15.41 an ounce, after earlier hitting its lowest since last July at $15.33 an ounce.
Platinum was 0.4 percent lower at $810.30 an ounce. In the previous session, it hit an over two-week low of $798.14.
Palladium was down 0.1 percent at $905.47 per ounce. It fell to its weakest since April 9 at $902.97 on Wednesday.


Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

Updated 14 December 2018
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Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

  • Ransom payment would set dangerous precedent
  • NOC declared force majeure on exports on Monday

BENGHAZI: Libya’s state-owned National Oil Corp. (NOC) said it was against paying a ransom to an armed group that has halted crude production at the country’s largest oilfield.
“Any attempt to pay a ransom to the armed militia which shut down El Sharara (oilfield) would set a dangerous precedent that would threaten the recovery of the Libyan economy,” NOC Chairman Mustafa Sanalla said in a statement on the company’s website.
NOC on Monday declared force majeure on exports from the 315,000-barrels-per-day oilfield after it was seized at the weekend by a local militia group.
The nearby El-Feel oilfield, which uses the same power supply as El Sharara, was still producing normally, a spokesman for NOC said, without giving an output figure. The field usually pumps around 70,000 bpd.
Since 2013 Libya has faced a wave of blockages of oilfields and export terminals by armed groups and civilians trying to press the country’s weak state into concessions.
Officials have tended to end such action by paying off protesters who demand to be added to the public payroll.
At El Sharara, in southern Libya, a mix of state-paid guards, civilians and tribesmen have occupied the field, camping there since Saturday, protesters and oil workers said. The protesters work in shifts, with some going home at night.
NOC has evacuated some staff by plane, engineers at the oilfield said. A number of sub-stations away from the main field have been vacated and equipment removed.
The occupiers are divided, with members of the Petroleum Facilities Guard (PFG) indicating they would end the blockade in return for a quick cash payment, oil workers say. The PFG has demanded more men be added to the public payroll.
The tribesmen have asked for long-term development funds, which might take time.
Libya is run by two competing, weak governments. Armed groups, tribesmen and normal Libyans tend to vent their anger about high inflation and a lack of infrastructure on the NOC, which they see as a cash cow booking billions of dollars in oil and gas revenues annually.