Commodities

PRECIOUS-Gold little changed as dollar eases on U.S.-China trade hopes

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* Platinum rebounds from more than one-month low

Beijing, Washington face March 1 deadline for trade deal (Updates prices, adds details)

By Eileen Soreng

Feb 12 (Reuters) – Gold prices were little changed on Tuesday, buoyed by a slight retreat in the U.S. dollar, amid optimism for a resolution to the U.S.-China trade conflict.

Spot gold edged up 0.1 percent to $1,309.09 an ounce at 12:27 p.m. EST (1727 GMT), having declined 0.4 percent in the previous session.

U.S. gold futures rose 0.1 percent to $1,312.90.

“Gold is likely to be quiet for the remainder of the week pending news on the U.S.-China trade talks, and the U.S. government shutdown,” said Bob Haberkorn, senior market strategist at RJO Futures.

“If there is an announcement that the government is going to be open and if there’s a breakthrough in trade talks, gold will initially sell off, but traders want to own gold right now with the U.S. Federal Reserve being dovish.”

The dollar index, which tracks the greenback against six major currencies, eased on Tuesday, after its longest winning streak in two years which was partly buoyed by investors piling into it as a preferred refuge amid worries over the trade row.

In the latest development surrounding a logjam in Washington over funding for a border wall with Mexico, President Donald Trump said he had yet to decide whether to support an agreement reached by congressional negotiators to avert another partial government shutdown that includes no funds for the wall.

Gold’s momentum was held in check by increased appetite for riskier assets like equities, with world stock markets gaining on expectations of a trade agreement between Washington and Beijing.

U.S. and Chinese officials expressed hopes that a new round of talks, which began in Beijing on Monday, would bring them closer to easing a nearly year-long trade war.

“A U.S.-China trade deal could boost the yuan, allowing Chinese investors to purchase more gold than would otherwise be the case,” Forex.com analyst Fawad Razaqzada said in a note.

Investors will also be watching for further clarity on the Fed’s monetary policy going forward, analysts said.

Spot gold rose to its highest since late April at $1,326.30 in January, after the Fed kept interest rates steady and said it would be patient on further hikes amid a cloudy outlook for the U.S. economy due to global growth concerns.

On the technical front, “if we now see short-term resistance break around $1,315, then this could lead to further technical follow-up buying pressure towards and possibly beyond January’s high of $1,326,” Forex.com’s Razaqzada added.

Among other metals, palladium firmed 1 percent to $1,393.54 an ounce, while silver dipped 0.1 percent to $15.68.

Platinum rose 0.5 percent to $785.36 an ounce, having touched its lowest since Jan. 2 at $779.50 in the previous session. (Reporting by Eileen Soreng and Swati Verma in Bengaluru; Editing by Bernadette Baum)

Source

neallesh@yahoo.co.uk

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