Gold stays below $1,250 on dollar resurgence as oil price uptick runs out of steam

Gold prices saw a modest uptick on Friday (31 March) following two sessions in negative territory, while oil futures headed sideways during an uneventful European session in the commodities market.

Safe-haven demand for gold remained lacklustre two days after the UK gave the European Union formal notice of its intention to leave the 28-member bloc and the dollar held a position of relative strength compared to major global currencies.

At 5:04pm BST, spot gold was trading up 0.35% or $4.19 to $1,246.93 an ounce, but still below the psychological $1,250-level, while Comex gold for June delivery was up a mere 0.07% or 90¢ to $1,248.90 an ounce.

FXTM research analyst Lukman Otunuga said gold remains supported above $1,225. "With risk aversion set to heighten amid the Brexit developments, gold bulls still have an opportunity to propel prices higher.

"Although most investors remain somewhat optimistic over President Donald Trump's pro-growth policies boosting US growth, a situation where the reality is well below market expectations could bolster the yellow metal's allure."

Elsewhere in the precious metal market, spot platinum was down 0.07% or 62¢ to $948.15 an ounce, while the Comex silver contract for May delivery was broadly flat at $18.21 an ounce.

Away from precious metals, oil futures failed to register any substantial moves intraday, with much of the market contemplating some form of market supportive action by Opec at its next meeting in Vienna, Austria on 25 May 2017.

At 5:10pm BST, the Brent front month futures contract was down 0.41% or 27¢ to $52.69 per barrel, while the West Texas Intermediate was up 0.38% or 19¢ at $50.54 per barrel, still holding firm above the $50 per barrel level.

Michael Wittner, global head of oil research at Société Générale said: "We continue to believe that Opec cuts will result in the rebalancing of the global oil markets in 2017, despite recovering US production, and assuming that Opec cuts are rolled over for the second half.

"The US weekly stats should soon start to provide evidence of rebalancing to the oil markets, probably by the end of April."