Last Updated : Aug 14, 2019 09:53 AM IST | Source: Reuters

Gold holds steady as political, trade woes persist

Spot gold was steady at $1,501.73 per ounce at 0251 GMT. U.S. gold futures were down 0.1% at $1,512.10 an ounce.


Gold steadied on Wednesday, consolidating around the key $1,500 level, buoyed by uncertainty around political risks such as the unrest in Hong Kong amid global growth concerns, while a slight easing of the Sino-U.S. trade tensions kept prices in check.

Spot gold was steady at $1,501.73 per ounce at 0251 GMT. U.S. gold futures were down 0.1% at $1,512.10 an ounce.

"Easing in trade tensions, geopolitical risks have provided some sort of hope in the markets which boosted equities, because of this there is a brief pullback in gold prices," said John Sharma, an economist with National Australia Bank.


"However, the trade dispute is still not resolved. Geopolitical risks in Hong Kong, trends in global growth and we are also expecting at least one more cut from the Federal Reserve. All these factors are supportive for gold," Sharma added.

U.S. President Donald Trump on Tuesday backed off his Sept. 1 deadline for 10% tariffs on remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods, in the hopes of blunting the impact on U.S. holiday sales.

The reprieve in trade dispute between the world's biggest economies boosted investor sentiment towards riskier assets, as Asian shares joined a global equities rally on Wednesday.

"Financial markets are starved for a bit of good news. China said it would hold trade talks by phone in two weeks, and the U.S. saying it will delay some of the tariffs have driven a wave of profit-taking across safe-haven assets," Stephen Innes, managing partner, VM Markets wrote in a note.

On Tuesday, gold prices rose to their highest in more than six years triggered by a rout in the Argentine peso and unrest in Hong Kong, before closing down 0.7%.

Market focus shifts to the U.S. Federal Reserve's annual symposium next week for clues on the future trajectory of interest rates. Traders see a 86.2% chance of a 25 basis-point rate cut by the U.S. central bank this September.

Lower U.S. interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion.

Meanwhile, the dollar index was relatively unchanged against a basket of major currencies on Wednesday, after rising 0.4% overnight.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 1.31% to 836.66 tonnes on Tuesday from 847.77 tonnes on Monday.

Among other precious metals, silver eased 0.1% to $16.95 per ounce, after hitting more than one-and-a-half-year high in the previous session.

Platinum slipped 0.8% to $845 an ounce and palladium dipped 0.7% to $1,444.20 an ounce.
First Published on Aug 14, 2019 09:40 am