Gold rises as worries over trade deal, economic slowdown linger

Gold rose on Monday, after touching a three-month low in the previous session, as concerns linger over the trade war between the United States and China and the prospect of a slowing global economy.

Spot gold was up 0.2 percent at $1,461.41 per ounce by 0343 GMT, while U.S. gold futures were flat at $1,462.60 per ounce.

“Gold prices are pretty low now and investors are taking this opportunity to take positions in the safe-haven metal as there is still an upside to it, considering the concerns over the trade war and global economy,” said Brian Lan of Singapore dealer GoldSilver Central.

Gold buying by central banks, especially in China, is also boosting prices, Lan added.

Trade talks with China were moving along “very nicely,” U.S. President Donald Trump said on Saturday, but the United States would only make a deal with Beijing if it was the right deal for America.

Washington and Beijing had agreed to roll back tariffs as part of the first phase of a trade deal, but Trump later denied any such agreement.

The trade war has roiled financial markets and spurred fears of a global economic slowdown, pushing the precious metal up nearly 14 percent this year.

Fanning concerns over global growth, the Chinese producer price index (PPI), seen as a key indicator of corporate profitability, fell 1.6 percent in October from a year earlier, its steepest decline since July 2016, data showed, outstripping analysts’ expectation for a contraction of 1.5 percent.

“Gold’s next technical support is at $1,450, after which the charts open wide until $1,400 an ounce,” OANDA analyst Jeffrey Halley said in a note.

Asian shares reversed gains on Monday as uncertainty persisted over whether the United States and China could end their damaging trade war.

Meanwhile, chaos erupted across Hong Kong a day after police opened fire to break up demonstrations that are entering their sixth month.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 1.44 percent to 901.19 tonnes on Friday.

Physical gold buying picked up in India, the world’s second biggest consumer, as a price correction revived demand in narrowing discounts to the lowest level in five months, while buying interest was tepid in other parts of Asia.

Elsewhere, silver was up 0.3 percent at $16.84 per ounce, platinum dipped 0.1 percent to $885.36 per ounce and palladium rose 0.4 percent to $1,749.46 an ounce.

Source: Reuters