· Gold steadied on Thursday as investors looked for further cues from trade talks between the United States and China, which bolstered risk appetite and lifted the dollar, but the metal held on to support around the key $1,400 per ounce pivot.
· Spot gold edged 0.1% lower to $1,407.71 per ounce as of 1:37 p.m. EDT(1737 GMT), having briefly dipped below $1,400 earlier in the session.
Prices have fallen more than $37 since gold’s six-year high of $1,438.63 on Tuesday.
· U.S. gold futures settled 0.2% lower at $1,412 per ounce.
· “We are still in a bullish momentum for gold with a couple of days of consolidation ... (We are seeing) a little pull-back on profit taking,” said Phillip Streible, senior commodities strategist at RJO Futures, adding a stronger dollar and equities were weighing on bullion.
“People are fearful of giving up their whole gains (in gold).”
· The South China Morning Post (SCMP), citing sources, said Washington and Beijing were laying out an agreement that would help avert the next round of tariffs on an additional $300 billion of Chinese imports.
· Investors hopes of a trade deal, however, were slightly dented by White House economic adviser Larry Kudlow’s comment that Washington may move ahead with more tariffs on Chinese goods after all.
· Global equities rose for the first time in five sessions, while U.S. stocks pared gains slightly on the back of Kudlow’s comments.
· Meanwhile, the dollar eked out gains following days of weakness as comments from Fed officials on Wednesday signalled aggressive interest rate cuts were unlikely in its July meeting.
· Futures are 100% priced for a cut of 25 basis points next month, and imply a 22% chance of 50 basis points.
· Higher interest rates boost the dollar, making dollar-denominated gold more expensive for buyers using other currencies, and they reduce investor interest in non-yielding bullion.
· The spike in the U.S. dollar from the lows of yesterday along with factors such as sliding yields precipitated to a bit of a sell-off in gold, said Bart Melek, head of commodity strategies at TD Securities in Toronto.
“For much of the quarter we are going to be trending around $1400.”
· Amongst other metals, silver declined 0.1% to $15.22 per ounce, while platinum was down 0.1% at $812.89. Palladium prices rose 1.7% to $1,547.91.
Reference: Reuters
Thai
Eng