Gold settles lower as dollar hits 2018 peak

Gold futures tilted lower in American trade to near five-month lows as the dollar index hit December 18, 2017 highs, amid a lack of data from the US.

As of 02:34 GMT, gold futures due on June 15 inched down 0.04% to $1,288.90 an ounce from the opening of $1,289.40, while the dollar index rose 0.29% to 93.74 from the opening of 93.47. 

Federal Reserve Bank of Cleveland President Loretta Mester spoke earlier today about monetary policy at the ECB macroprudential policy and research conference, in Frankfurt, where she noted the US economy is almost at full employment, with outlook the best in a long time. 

Mester said rate hikes are some of the tools used to counter potential risks to financial stability, asserting the importance of stability in the financial system to contain risks. 

Recently, the World Gold Council reported a 7% drop in global demand in the first quarter of 2018 to 973.5 tonnes, the lowest since the first quarter of 2008, as investments fell 27% on the precious metal to 287 tonnes from 383 tonnes in the first quarter of 2017. 

Central banks' gold demand rose 42% to 116.5 tonnes, especially from Russia, while jewelry demand steadied at 487.7 tonnes, as mine supplies grew 1% y/y to 770 thousand tonnes. 

Gold holdings at SPDR Gold Trust, the world's largest gold-backed investment fund, steadied at 856.17 tonnes on Thursday with no change, the lowest since April 5, after rising 3%, or 23.63 tonnes in 2017, while gold prices rose 13% last year.