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Gold slips from 1-month peak on Sino-US trade talk hopes

Gold slips from 1-month peak on Sino-US trade talk hopes

Wed May 15 2019

 

Gold prices edged lower on Wednesday, retreating from a one-month peak hit in the previous session as optimism surrounding trade talks between Washington and Beijing soothed investor concerns, boosting global stocks and the dollar.

 

Spot gold fell 0.1 per cent to $1,295.54 per ounce by 0313 GMT. US gold futures were steady at $1,296.10 an ounce. “Gold is restrained as people are still interested in the dollar. The $1,300 level also looks like a good resistance,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

 

The dollar held firm in early Asian trading, having been supported on Tuesday by US President Donald Trump downplaying the recent escalation in his trade war with China as “a little squabble” and insisting that talks between the two countries had not collapsed.

 

A stronger dollar makes gold more expensive for holders of non-US currency. Simultaneously, Asian stocks also turned cautiously optimistic surrounding trade developments between the two countries on Wednesday, while still not completely discounting the possibilities of a protracted spat.

 

“The (gold) market is holding because some people bought gold especially after the Chinese government also raised tariffs on US goods,” Fung said, adding that the metal is expected to remain range-bound between $1,280 and $1,310 an ounce. The biggest trigger for gold, which had been mostly range-bound for the past week, came on Monday after China announced that it would impose retaliatory tariffs on a range of US goods.

 

There was some profit-taking in the previous session after prices jumped about $20 on Monday and above the key $1,300 level, analysts and traders said. “The ongoing Sino-US trade dispute has illustrated cooling conditions as both parties expressed willingness to resolve existing trade differences,” Phillip Futures analysts wrote in a note.

 

“Gold prices, though easing up on bullish gains, will remain supported as investors remain cautious on lingering US-China trade worries in the near term.” Market participants will now keenly eye a bevy of economic data from Europe that will provide further cues on the strength of the global economy.

 

Among other precious metals, silver remained steady at $14.78 per ounce, while platinum fell 0.4 per cent to $852.25. Palladium edged 0.1 per cent higher to $1,336.95.

 

Source: Reuters

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