Spot gold was up 0.3 percent at $1,256.23 an ounce as of 0430 GMT. It earlier rose to as high as $1,260.43, a one-week high. The yellow metal fell to its lowest since Dec. 12 at $1,237.32 in the previous session.
U.S. gold futures for August delivery were 0.4 percent higher at $1,258.10 an ounce.
· "Today, there's very little happening ahead of the fourth of July holiday, but we are seeing some significant U.S. dollar weakness come across the board against other currencies," a Sydney-based trader said.
· The dollar index, which measures the greenback against a basket of six major currencies, was down 0.1 percent at 94.536.
· Meanwhile, Asian stocks were on shaky ground on Wednesday as the spectre of a Sino-U.S. trade war haunted investors ahead of an July 6 deadline for U.S. tariffs on billions of dollars worth of Chinese imports.
· "Since the trade wars have been doing the rounds, if anything we've seen gold come lower. But if it continues to escalate gold could go only one way and that's higher," the trader said.
· China is putting pressure on the European Union to issue a strong joint statement against President Donald Trump's trade policies at a summit later this month but is facing resistance, European officials said.
Investors are also awaiting minutes of the June U.S. Federal Reserve meeting which is due on Thursday and the U.S. non-farm payrolls data on Friday.
· "Gold now has the potential to move back up to the $1,300 level, given market expectations appear to be becoming less hawkish on the interest rate outlook," said Alasdair Macleod, head of research with Toronto-based Goldmoney Inc.
· In other precious metals, silver was up 0.1 percent to $16.04 an ounce and palladium gained 0.6 percent to $945 per ounce.
Platinum was 0.1 percent higher at $837.80 an ounce. The metal fell on Tuesday to the lowest since December 2008 at $793.
· Technically, gold prices also scored a bullish “outside day” up on the daily bar chart. The gold bears still have the firm overall near-term technical advantage. A 2.5-month-old downtrend is in place on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,275.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,230.00. First resistance is seen at $1,260.00 and then at $1,268.00. First support is seen at $1,250.00 and then at $1,240.00. Wyckoff's Market Rating: 3.0
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· Sentiment in the precious metals market is clearly bearish in the near-term as Wall Street and Main Street both look for gold to slide further in this week, based on the Kitco News weekly survey.
· For the trading week now winding down, 59% of Wall Street was bullish, while the largest block of Main Street voters – 40% -- was bearish. Just before 11 a.m. EDT, Comex August gold was down 1.4% for the week so far to $1,252.50 an ounce.
“I think the bias remains lower,” said Peter Hug, global trading director of Kitco Metals.
· Sean Lusk, director of commercial hedging with Walsh Trading, figures gold could test a trendline around $1,238 to $1,240. Some buying in the form of profit-taking by bearish traders enabled a modest bounce early Friday. Otherwise, recent U.S. dollar strength has eroded any safe-haven buying that otherwise may have occurred, he added.
“I think there will be a little more downside, then up,” Lusk said, noting a seasonal bounce in gold is still “down the road” a ways.
· Adam Button, managing director of ForexLive, also called for gold to be lower.
“Gold is badly struggling and technically weak,” Button said. “There’s no near-term catalyst for a turnaround.”
· Ralph Preston, principal with Heritage West Financial, also anticipates further gold weakness. Preston said he anticipates the U.S. dollar will remain underpinned, thus “tilting the entire commodity complex (except crude oil because of actual supply shortages) to the downside.”
Richard Baker, editor of the Eureka Miner Report, sees gold slipping to around $1,245, in particular citing the rapid depreciation of China’s currency.
“In the currency markets, the rapid depreciation of the Chinese yuan is striking,” Baker said. “Even more stunning is the tight correlation with the gold price going back to the U.S.-China trade tensions, which began to escalate in late March. As the yuan weakens, so does gold. Interestingly, gold's relation to the yuan is stronger than the correlation to the U.S. dollar index.
“If this correlation holds, further weakening of the Chinese currency does not bode well for a gold recovery from the present $1,250 level.”
· Meanwhile, Afshin Nabavi, head of trading at trading house MKS (Switzerland) SA, is one of those calling for gold to fare better at the start of a new quarter.
“The euro is edging higher and the dollar is losing a little value,” he said early Friday. Nabavi also cited news reports that U.S. President Donald Trump may withdra
Reference: Reuters
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