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Gold firms as dollar eases on U.S.-China trade hopes

Reuters 

By Eileen Soreng

(Reuters) - Gold prices edged higher on Tuesday, buoyed by a slight retreat in the U.S. dollar amid optimism about a potential resolution of the U.S.-trade conflict.

Spot gold was up 0.2 percent at $1,310.95 an ounce at 1:48 p.m. EST (1848 GMT), having declined 0.4 percent in the previous session.

U.S. gold futures settled 0.2 percent higher at $1,314.00.

"Gold is likely to be quiet for the remainder of the week pending on the U.S.-trade talks, and the shutdown," said Bob Haberkorn, at

"If there is an announcement that the government is going to be open and if there's a breakthrough in trade talks, gold will initially sell off, but traders want to own gold right now with the being dovish."

The dollar index, which tracks the greenback against six major currencies, eased on Tuesday, after its longest winning streak in two years which was partly buoyed by investors piling into it as a preferred refuge amid worries over the trade row.

In the latest development surrounding a logjam in over funding for a border wall with Mexico, said he had yet to decide whether to support an agreement reached by congressional negotiators to avert another partial government shutdown that includes no funds for the wall.

Gold's momentum was held in check by increased appetite for riskier assets, with world stock markets gaining on expectations of a trade agreement between and

U.S. and Chinese officials expressed hopes that a new round of talks, which began in on Monday, would bring them closer to easing a nearly year-long trade war.

"A U.S.-trade deal could boost the yuan, allowing Chinese investors to purchase more gold than would otherwise be the case," said in a note.

Investors will also be watching for further clarity on the Fed's monetary policy going forward, analysts said.

Spot gold rose to its highest since late April at $1,326.30 in January, after the kept interest rates steady and said it would be patient on further hikes amid a cloudy outlook for the U.S. economy due to global growth concerns.

On the technical front, "if we now see short-term resistance break around $1,315, then this could lead to further technical follow-up buying pressure toward - and possibly beyond - January's high of $1,326," Forex.com's Razaqzada added.

Meanwhile, palladium gained 0.8 percent to $1,397 an ounce, while silver rose 0.1 percent to $15.71.

climbed 0.4 percent to $784.50 an ounce, having touched its lowest since Jan. 2 at $779.50 in the previous session.

(Reporting by Eileen and in Bengaluru)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, February 13 2019. 00:40 IST
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