Gold fell to a near six-month low and platinum hit its lowest since February 2016 on Wednesday as a stronger greenback was overwhelmed by safe-haven buying, spurred by fears of a trade war between the world's two top economies. The US dollar index touched its highest since July 2017 against a basket of currencies, as US President Donald Trump threatened to impose a 10 percent tariff on $200 billion of Chinese goods and Beijing said it would retaliate.
The trade spat reinforced concerns about global growth and triggered a selloff in equities, while boosting safe-haven currencies such as the yen and the dollar.
Typically, gold is used by investors as a place to park assets during times of global uncertainty.
But the dollar's inverse relationship with bullion - a stronger greenback makes dollar-denominated assets more expensive for holders of other currencies - can often override other factors.
"In these environments, the Treasuries and dollars would tend to be safe havens," said TD Securities' Bart Melek. "Gold would tend to be as well, though you had a big jump in the dollar, so that pressures gold."
Spot gold fell 0.1 percent at $1,276.19 per ounce by 1:43 p.m. EDT (1743 GMT), having touched its lowest since Dec. 22 at $1,270.
US gold futures for August delivery settled down $1.50, or 0.1 percent, at $1,278.60 per ounce.
Platinum fell 1.6 percent at $867 an ounce, earlier touching its lowest since February 3, 2016 at $856.85.
"Platinum is coming off with gold (and stocks)," said Patrick Magilligan, director of metals marketing for Key Metal Refining.
The rising prospect of further US Federal Reserve interest rate increases placed further pressure on gold. US homebuilding surged to near an 11-year high in May.
Meanwhile, silver dropped 0.5 percent at $16.32 an ounce, after hitting its lowest since May 16 at $16.21. Palladium lost 2.3 percent at $967.25 an ounce, after marking its lowest since May 21 at $964.20.
Comments
Comments are closed.