Gold prices on Thursday held near two-week lows touched in the previous session, as the dollar recouped losses after cautious comments from US Trade Representative Robert Lighthizer dented investors' hopes for a closure to the tariff war with China. As of 0727 GMT, spot gold was 0.2 percent higher at $1,322.16 per ounce, while US gold futures were up 0.1 percent at $1,322.
The safe-haven metal hit the lowest since Feb. 15 at $1,316.43 in the previous session, but marked its fifth straight monthly gain. Lighthizer told a Congressional hearing it is too early to predict the outcome of ongoing trade talks with Beijing and the United States will need to maintain the threat of tariffs on Chinese goods for years even if the two sides strike a deal.
"There is some uncertainty about the trade deal and some of the safe-haven (demand) has gone to the US dollar. That has taken a bit of a bid from gold," said John Sharma, economist, National Australian Bank. "Overall, gold is expected to go up with some corrections and prices will move around the $1,310-$1,330 levels depending on the dollar," Sharma said, adding, "main support comes from Federal Reserve's dovish stance and a lot of central banks are keen on accumulating gold."
"The precious metal's recent consolidation is supported by the indecision the financial markets have in pricing in what will be the Fed's next move," OANDA senior market analyst Edward Moya said in a note.
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