Gold prices range-bound ahead of Trump-Xi meet at G-20 summit
Gold prices held range-bound on Friday as the dollar trod water after U.S. President Donald Trump sent mixed signals about the prospects for a trade deal with Beijing, while palladium notched a record high.
Spot gold was little changed at $1,224.10 per ounce, as of 0357 GMT. U.S. gold futures were flat at $1,230.5 an ounce.
Donald Trump and Chinese leader Xi Jinping are expected to discuss trade on the sidelines of the G-20 summit in Argentina on Saturday, where global trade tensions are expected to dominate the agenda.
However, Trump sent mixed signals on Thursday about the trade deal, saying an agreement was close but he was not sure he wanted one, just as he left for Argentina for a meeting with President Xi.
“The gold market shall be closely looking ahead to further cues from the G20 summit this weekend,” said Sugandha Sachdeva, vice president of metals, energy and currency research at Religare Broking.
“Any positive development will be negative for the dollar index, which has benefited as a safe haven this year whenever tensions were seen escalating. On the contrary, if the trade spat intensifies, the stage will be set for further decline in gold prices.”
The dollar index, which measures the greenback against a basket of six major currencies, was little changed on Friday.
Gold prices have lost about 10 percent from their April peak as investors turned to the dollar as a safe haven with the trade war unfolding against a backdrop of higher U.S. interest rates.
Minutes from the U.S. Federal Reserve’s November meeting indicated that another interest rate hike is warranted. However, Fed officials also kept the debate open on when the U.S. central bank might pause its monetary tightening and how it would relay those plans to the public.
Higher interest rates raise the opportunity costs of holding gold, which earns nothing and costs money to store and insure.
“Gold has held its 100-day moving average at $1,211 and $1,215 to the 50-day moving average, so we definitely are moving into supports at the $1,215-$1,230 area,” a Hong Kong-based trader said.
Palladium struck a record high of $1,190, and was poised for its biggest monthly gain since December 2017.
Spot silver inched 0.2 percent higher to $14.33 an ounce. Prices have gained about 0.7 percent for the month so far.
Platinum dipped 0.7 percent to $811.15 per ounce. The metal was on track to mark its fourth consecutive weekly decline, after dropping about 3 percent for the week so far.
Source: Reuters
