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Gold holds steady near 1-week low

Gold holds steady near 1-week low

Thu July 12 2018

 

Gold prices held steady on Thursday, close to a one-week low hit in the previous session, as the US dollar strengthened against the yen, amid an intensifying trade war between the world's two biggest economies.

 

Spot gold held steady at $1,241.20 an ounce at 0100 GMT. The yellow metal slipped 1 per cent and hit an over one-week low at $1,240.89 on Wednesday. US gold futures for August delivery were 0.2 percent lower at $1,241.60 an ounce.

 

The dollar index, which measures the greenback against a basket of six major currencies, was flat at 94.733. The dollar rose to 112.12 yen , close to a six-month peak touched on Wednesday.

 

China vows to hit back

China accused the United States of bullying and warned it would hit back after the Trump administration raised the stakes in their trade dispute, threatening 10 per cent tariffs on $200 billion of Chinese goods in a move that rattled global markets.

 

The US Senate had made a minor effort to push back against President Donald Trump's trade policies on Wednesday by backing a non-binding motion to give Congress a role in his decisions to impose tariffs for national security reasons.

 

A struggle by employers to fill jobs shows the US economy is strong, and the rise in housing and stock prices is not a sign of a risky build-up in leverage in the financial system, the head of the New York Federal Reserve Bank had said on Wednesday.

 

ECB policy stance

European Central Bank policymakers are split over when the ECB might raise interest rates next year, with some saying an increase is possible as early as July 2019 and others ruling out a move until autumn, according to several sources.

 

The fact that investors are siphoning money out of stocks is not helping gold, with the safe-haven asset suffering as people wary of a global trade war flock to the US dollar. US fund investors pulled $1 billion from commodity funds, including those invested in the precious metal, the largest withdrawals since July 2017, Investment Company Institute (ICI) data showed on Wednesday.

 

Russia produced 92.56 tonnes of gold in the first five months of 2018, up from 90.39 tonnes in the same period in 2017, the finance ministry had said on Wednesday.

 

A surplus of platinum and demand concerns due to a dispute over global trade have fuelled a sell-off that saw prices of the autocatalyst metal hit their lowest in a decade, below the cost of production for many mines in top producer South Africa.

 

Source: Reuters

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