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Gold holds steady on global growth concerns; trade talks in focus

Reuters 

By N R

(Reuters) - Gold prices held firm on Monday, supported by worries over a slowdown in global economic growth and uncertainties around Sino-U.S. trade war, but a strong dollar limited the safe-haven metal's appeal.

Spot gold was marginally lower at $1,312.76 per ounce, as of 0254 GMT, while U.S. gold futures fell 0.2 percent to $1,316.50 per ounce.

"Global growth worries, absence of positive signs in U.S-trade (talks) and reduction in the euro-zone growth forecasts have laid a strong foundation for gold in the longer run," said Benjamin Lu, an with Singapore-based

"There are a lot of headwinds for gold in the near-term from the six-week rally in U.S. equities and a vigorous dollar."

Investors are looking ahead to trade talks between and this week with a delegation of U.S. officials travelling to for the next round of negotiations. U.S. said last week that he had no plans to meet with Chinese before a March 1 deadline to achieve a trade deal.

Trump has vowed to increase U.S. tariffs on $200 billion worth of Chinese imports if the two sides cannot reach a deal by 12:01 a.m. (0501 GMT) on March 2.

Trade tensions between the world's top two economies have rattled financial markets since last year and also boosted the appeal of the U.S. dollar as a safe-haven.

The dollar index was hovering near a more than one-month high touched in the previous session.

A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.

Gold slumped to a more than 1-1/2-year low in mid-August to $1,159.96 on rising interest rates and a strong dollar. But, tumultuous stock markets and expectations of a pause in interest rate hikes this year helped gold touch a nine-month high at $1,326.30 in late January.

Tighter financial conditions since last September make further interest rate hikes seem much less necessary than just a few months ago, said on Friday.

While gold is supported by the Fed's dovish policy, prices will likely remain range-bound until there is clarity on the trade front and shutdown, said in a note.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, saw outflows for five straight sessions last week.

Talks on border security funding collapsed after Democratic and Republican lawmakers clashed over immigrant detention policy as they worked to avert another shutdown.

Meanwhile, palladium fell 0.5 percent to $1,395 an ounce.

Spot silver dropped 0.2 percent to $15.79, while platinum was down 0.5 percent at $794.

(Reporting by in Bengaluru; Editing by Subhranshu Sahu)

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

First Published: Mon, February 11 2019. 09:13 IST
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