Spot gold was up 0.4% at $1,505.06 per ounce, as of 0640 GMT, having risen about 1% so far this week. U.S. gold futures were up 0.5% at $1,513.5 per ounce.
“A weaker U.S. dollar is giving gold a little bit of an upward drift,” said Michael McCarthy, chief market strategist at CMC Markets, adding that “prices are still very much in the middle of a trading range and pinned to $1,500 level.”
· The dollar nursed losses against most major currencies, as central banks in Switzerland and the UK refrained from cutting rates, while risk appetite ebbed on caution about U.S-China trade talks.
“Investors are all waiting on any further developments in the trade negotiations as they move towards October meeting and that may provide next big driver for gold prices,” McCarthy said.
U.S. and Chinese deputy trade negotiators resumed face-to-face talks for the first time in nearly two months on Thursday, trying to lay the groundwork for high-level talks in early October.
· Gold prices have risen about 17% this year mainly on U.S.-China trade tensions, concerns over the global economic growth outlook and prospects of monetary easing by central banks.
The Fed cut interest rates for the second time this year on Wednesday to help sustain economic expansion but gave mixed signals on future rate cuts.
· Also, giving bullion a lift were tensions in the Middle East as the United States said on Thursday it was building a coalition to deter Iranian threats following a weekend attack on Saudi Arabian oil facilities.
· The strategy for retaliation against the attacks on Saudi oil plants is not clear and the uncertainties are keeping gold’s safe-haven bid intact, said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.
· On the technical front, signals are mixed for spot gold as it is stuck in a narrow range of $1,488-$1,514 per ounce, according to Reuters technical analyst Wang Tao.
· Gold holds on to recovery gains amid trade/political pessimism
In addition to bouncing off multi-month-old rising trend-line, Gold gains support form recently downbeat trade/political headlines while taking the bids to $1,500 during Friday’s Asian session.
Given the lack of major data/events, investors will keep an eye over the trade/political headlines for fresh direction.
Technical Analysis
FXStreet Analyst Ross J Burland spots the bulls’ struggle while saying:
"The bearish pin bar and the 4-HR 200 moving average is keeping the bulls in check with a series of failing bullish attempts higher in the 1,500s. A 50% mean reversion of the late June swing lows to recent highs around 1470 guards the 19 July swing highs at 1,452.93. On the upside, the 4-HR 200 MA is located at 1,510 and is guarding 1,550 level is still the target to breach which then opens prospects for 1,590 as the 127.2% Fibo target area."
· Elsewhere, palladium rose 1.2% to $1,642 per ounce, having earlier climbed to a record peak of $1,646.81.
Platinum was up 0.7% to $943.37 per ounce and silver gained 0.9% to $17.93.
Reference: Reuters, FX Street
Thai
Eng