Spot gold was up 0.2 percent at $1,259.30 an ounce, as of 0357 GMT. In the previous session, the metal touched its highest since June 26 at $1,265.87.
U.S. gold futures for August delivery were nearly unchanged at $1,259.90 an ounce.
• “A stronger yuan and slight weakness in the USD has provided support for gold,” said National Australia Bank economist John Sharma.
“Also, geopolitical issues such as Britain’s confused exit from the European Union and U.S. President Trump’s assertion that China was impeding North Korean progress on denuclearisation have provided some support for gold.”
• The dollar was little changed against a basket of six major currencies on Tuesday after dropping to its lowest since mid-June in the previous session, while the British pound was frail after the departure of two key eurosceptic ministers raised worries about a “hard Brexit.”
• Meanwhile, hedge funds and money managers raised their net long position in COMEX gold by 105 contracts to 4,291 contracts in the week to July 3, U.S. Commodity Futures Trading Commission (CFTC) data showed on Monday.
• Silver speculators trimmed their net long position by 11,515 contracts to 10,651 contracts, CFTC data showed. This was the weakest position since January.
• Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund dropped 0.18 percent to 800.77 tonnes on Monday.
• In other precious metals, silver climbed 0.4 percent to $16.14 an ounce and platinum gained 0.6 percent to $851.90.
• Technically, the gold bears still have the firm overall near-term technical advantage. A three-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 today’s high of $1,266.90 and then at $1,270.00. First support is seen at today’s low of $1,255.70 and then at $1,250.00. Wyckoff's Market Rating: 3.0.
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• Overall, the first salvos in the US-China trade war has undermined confidence in the metals space, with traditional safe-haven assets struggling for traction as other havens offer better returns. The energy sector has been driven higher by supply concerns, while the agricultural sector remains broadly under pressure.
Precious metals
Gold had been at the mercy of the US dollar’s firmness during the second half of June, struggling to maintain its label as a safe haven in times of trouble. The precious metal slumped almost 5.5% vs the dollar from its recent peak on June 13 to the near-term low on July 3. The rebound so far has taken the metal to the 38.2%Fibonacci level of the drop and is now consolidating at 1,257.513.
Latest data from Chicago’s Commitment of Traders report, with the snapshot taken as of July 3, shows that managed money accounts were net sellers of 1,230 gold contracts from a week prior and short positions exceeding long positions by 1,254 contracts.
Reference: Reuters, Kitco, Marketpulse
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