Gold prices held steady on Thursday as the dollar eased after U.S. President Donald Trump and European Commission President Jean-Claude Juncker agreed to work towards eliminating trade barriers, easing immediate concerns about global trade tensions.
Spot gold was little changed at $1,231.12 an ounce, as of 0412 GMT. Earlier in the session, the yellow metal hit $1,235.16, its highest in more than a week. U.S. gold futures for August delivery were 0.03 percent lower at $1,231.40 an ounce.
The dollar sagged on Thursday and the euro advanced, as the United States and the European Union agreed to begin talks towards easing trade barriers on industrial goods.
Trump on Wednesday agreed to refrain from imposing car tariffs, while the United States and European Union launched negotiations to cut other trade barriers, easing the threat of a transatlantic trade war.
“The meeting between the EU President Juncker and President Trump in which they discussed moves to ease trade tensions led to some softening of the U.S. dollar index, which has helped push up gold,” said National Australia Bank economist John Sharma.
“The U.S.-China trade dispute, though, still remains unresolved and is the more challenging one. On gold, it is likely to ebb and flow with U.S. dollar movements, before gaining momentum towards the end of the year,” Sharma said.
Spot gold may break a resistance at $1,237 per ounce and rise into a range of $1,246-$1,258, Reuters technical analyst Wang Tao said.
Meanwhile, investors are also watching out for the European Central Banks’ (ECB) policy meeting, which is due later in the day and the second-quarter U.S. economic growth data, which is expected on Friday.
The ECB is all but certain to keep policy on hold on Thursday, arguing that the risks from an amplifying global trade conflict don’t warrant a deviation from its plan to gently exit its easy-money policy of the last few years.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.29 percent to 800.20 tonnes on Wednesday.
In other precious metals, silver edged 0.2 percent higher to $15.59 an ounce.
Palladium dropped 0.8 percent to $931.30 an ounce and platinum was nearly unchanged at $839.90 an ounce.