Gold gains as dollar wilts on Sino-US trade deal hopes

Gold

Spot gold was up 0.3 percent at $1,296.61 per ounce as of 0352 GMT, after touching its lowest in more than a month at 1,289.91 in the previous session.

Gold prices edged higher on Monday, after falling below the critical $1,300 level to their lowest since January 25 in the previous session, as the dollar softened on prospects of a trade deal between China and the United States.

Spot gold was up 0.3 percent at $1,296.61 per ounce as of 0352 GMT, after touching its lowest in more than a month at 1,289.91 in the previous session.

U.S. gold futures were down 0.2 percent at $1,297.20 per ounce.

The U.S.-China trade deal appears to be closer to reality, rolling back U.S. tariffs on Chinese goods, as Beijing makes pledges on structural economic changes and eliminates retaliatory tariffs, a source briefed on negotiations said on Sunday.

“Dollar rose quite considerably last week and brought gold prices down, but we are seeing a reversal of that now (on trade deal prospects),” said Kyle Rodda, a market analyst with IG Markets in Melbourne.

“The global economy is still slowing and central banks should intervene to support their economy, which gives upside potential for gold in the medium-term,” Rodda said, adding that a resolution of the trade war will support an improvement in the growth outlook.

The dollar was down about 0.1 percent against major currencies.

The dollar got further pressure from U.S. President Donald Trump’s comments that the Federal Reserve’s tight monetary policy was contributing to a strong dollar and hurting the United States’ competitiveness.

Gold may break a support at $1,289 per ounce and fall towards the next support at $1,271, as suggested by a retracement analysis, according to Reuters analyst Wang Tao.

Gold is likely to be range bound, in the next three months, as “good economic data from U.S. gives reason to expect the Fed to hike rates at some stage this year,” said Dominic Schnider, head of commodities and APAC forex at UBS Wealth Management in Hong Kong.

People were becoming more risk seeking which was also negative for gold, he said.

Gold prices broke the critical $1,300 support level on Friday as global stock markets rose.

As prices dipped, holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 1.50 percent on Friday, their biggest one-day percentage fall since December 2016.

SPDR holdings have now given up all the gains it saw in January and are now down over 1.5 percent this year.

Among the other precious metals, palladium gained 0.8 percent to $1,557 per ounce.Spot silver gained 0.1 percent to $15.22, while platinum was 0.1 percent higher at $857.65 an ounce.

Indian Stock Market- Get profitable Equity, MCX Service, HNI & Currency Services with good call accuracy. BSE Sensex & Nifty50. Our market researchers track the share positions and give best call accuracy to customers.

Please follow and like us:
20