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Gold hovers near 1-week low on buoyant dollar


By K. Narayanan

(Reuters) - Gold was trading close to a more than one-week low on Thursday weighed by a stronger dollar but uncertainties around the Sino-U.S. trade spat and concerns about slowing global growth supported the above the key $1,300 level.

Spot gold was steady at $1,306.08 per ounce by 1022 GMT, after touching its lowest since Jan. 29 at $1,302.11. Prices fell 0.7 percent in the previous session in their biggest one-day drop since Jan. 18.

U.S. gold futures were down 0.3 percent at $1,310.60.

"Despite concerns of a slowing global economic growth, it seems the dollar is providing some headwinds for gold at this stage," said Ross Norman, at

"Effectively this type of correction is not a bad thing but broadly speaking, the bull run is very much in place."

The extent of the current slowdown in the global economy was illustrated as unexpectedly cut its interest rates and data showed Germany's economy slowed in December, underscoring fears about a broader slump in

Gold rose to its highest level since late April last week after the kept interest rates steady but has lost ground ever since as the dollar gained.

The dollar index, which tracks the greenback against major currencies, was on course for a sixth straight session of gains and trading close to its two-week high, making bullion more expensive for holders of other currencies.

"Uncertainty over U.S.-trade relations and the potential for another shutdown continue to underpin interest toward $1,300 and should see supportive price action remain over the near term," said in a note.

In his State of the Union address U.S. repeated his promise to build a border wall with raising the prospect of another shutdown.

While Trump did not offer much clarity on the trade row, said on Wednesday that he and other U.S. officials will travel to next week aiming to clinch a deal.

"It would be interesting to see whether a test of the support level of $1,300 would attract the bulls and confirm the positive momentum of the last few months," wrote in a note.

Reflecting investor sentiment in gold, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell for a fourth straight session on Wednesday.

Among other precious metals, palladium gained about 0.4 percent to $1,38.50 per ounce.

Silver was up 0.1 percent at $15.68, and platinum lost about 0.2 percent to $801.11 per ounce, after touching its lowest level since Jan. 25.

(Reporting by K. Narayanan in Bengaluru; Editing by Keith Weir)

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

First Published: Thu, February 07 2019. 16:15 IST