Gold prices touched a one-week high on Wednesday, driven by upbeat safe-haven sentiment as hopes of a quicker resolution of the US-China trade dispute ebbed, while a potential trade feud with Europe deepened concerns over tepid economic growth. Spot gold was up 0.5% at $1,425.64 per ounce, as of 0711 GMT. Earlier in the session, the bullion hit $1,435.99, a peak since June 25. US gold futures rose 1.5% to $1,429.30 an ounce.
Extended weakness in global manufacturing data and US trade protectionism looked poised to support the bullion's appeal as investors avoided riskier assets, said Benjamin Lu, analyst, Phillip Futures. Just days after reaching a truce on China trade, the US Trade Representative's office turned to Europe on Monday in a long-running dispute over aircraft subsidies, adding extra products to a list of EU goods that may be hit with tariffs. The market also grew wary of the chances of a quick resolution to the year-long US-China trade war after US President Donald Trump's comments that any deal would have to be tilted in favour of Washington.
"Gold prices are on a path to get some correction ... Investors should buy on dips." Investors will now focus on the release of US economic data including non-farm payrolls on Friday, to better assess whether Fed will cut interest rates later this month. "Technically gold remains positive," said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers, adding there is a strong resistance around $1,435-$1,440 zone, while $1,410-$1,400 is a very good support for near term. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings dipped 0.2% to 798.44 tonnes on Tuesday. Silver rose 0.2% to $15.33 per ounce.
Comments
Comments are closed.