Gold prices steady on weaker US dollar, trade tension support
Gold prices were steady on Tuesday as the U.S. dollar remained on the back foot, with the metal supported by festering worries over U.S.-China trade tensions.
Spot gold was unchanged at $1,345.62 an ounce as of 0322 GMT.
“Despite a quietening of negative headlines overnight, its unlikely we’ve seen the last of China trade tensions or a weaker U.S. dollar for that fact. All of which continues to provide the most apparent reasons to own gold,” said Stephen Innes, head of trading for Asia-Pacific for OANDA in Singapore.
Against the yen, the dollar was down 0.1 percent at 107.03, off its seven-week high of 107.78 yen touched on Friday as traders braced for a meeting between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe starting on Tuesday.
The dollar index, which measures the greenback against a basket of currencies, also eased to 89.371 earlier, following a 0.4-percent fall on Monday.
Meanwhile, the likelihood that there would be no immediate military escalation in Syria following the weekend missile strikes by the United States, Britain and France, improved investor appetite for risk and dented gold’s appeal.
“In my view geopolitical events tend to have short-lived impact on gold prices unless they have far reaching economic consequences. So in this sense, the Russian/Chinese sanctions are far more important to the world economy and to gold as opposed to one-off strikes in Syria,” said INTL FCStone analyst Edward Meir.
The United States accused Russia on Monday of blocking international inspectors from reaching the site of a suspected poison gas attack in Syria and said Russians or Syrians may have tampered with evidence on the ground.
Gold is often seen as an alternative investment at times of political and financial uncertainty.
The U.S. yield curve reached it flattest level in over a decade on Monday after the White House said President Trump would nominate Richard Clarida as Federal Reserve Vice Chairman, adding another hawkish voice at the central bank.
Higher rates tend to boost the dollar, making greenback-denominated gold more expensive for buyers using other currencies.
U.S. gold futures eased 0.2 percent to $1,348.4 an ounce.
Meanwhile, silver was up 0.4 percent at $16.67 per ounce and platinum was 0.4-percent higher at $927.45.
Palladium was down 0.2 percent at $999.85 an ounce, after rising to $1,012.10 an ounce in the previous session, its strongest since March 1. Source: Reuters
