Gold dips to two-week low on economic recovery hopes
· Gold fell on Wednesday to its lowest price in two weeks as the easing of coronavirus restrictions around the world fed optimism that the global economy could rebound.
· Spot gold eased 0.1% to $1,709.50 per ounce by 1:07 p.m. EDT (1707 GMT). The session low was 1,693.22, its lowest since May 12.
· U.S. gold futures edged 0.1% higher at $1,707.90.
· "Stocks are slightly down because of the trade war news that has come up but safe assets are not gaining anything out of it because market sentiment is still up," said Bob Haberkorn, senior market strategist at RJO Futures.
"The trade war issue has taken a back seat as the reopening of the economies have boosted optimism and raised investor appetite for riskier assets."
· Tai Wong, head of base and precious metals derivatives trading at BMO, said: "Gold's dip under $1,715-20 on Tuesday is a technical breakdown and invalidates or pushes back at least the prospect of a strong rally."
· U.S. stocks were mixed in choppy trading, as technology stocks sold off on worries about Sino-U.S. tensions but some investors optimistic about a broad economic pickup.
· U.S. President Donald Trump stating Washington was working on a strong response to Beijing's proposed national security laws for Hong Kong.
· This year, gold has gained over 12% so far, and analysts said the precious metal's overall trajectory was positive, supported by low interest rates and global political and economic uncertainties.
· "Gold is used efficiently to hedge risks in a low real rates environment as the opportunity cost to hold it is low, we expect such favourable environment to continue," Societe Generale said in a note, forecasting prices to average $1,800 per ounce in the fourth quarter.
· Elsewhere, palladium fell 1.34% to $1,929.87 an ounce and platinum dipped 0.1% to $829.14, while silver rose 1.04% to $17.28.
Reference: Reuters
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