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Gold prices edge lower as U.S- EU trade concerns abate

Reuters  |  LONDON 

By Shabalala

LONDON (Reuters) - Gold edged lower on Thursday in response to an easing of trade tensions after the agreed to refrain from imposing tariffs on cars from the

The two sides will also begin talks to cut other trade barriers, they announced on Wednesday following a meeting at the

Gold usually loses ground to riskier assets such as stocks when global financial and political worries fade.

Spot gold slipped 0.2 percent to $1,228.33 per ounce by 1005 GMT, after it rose 0.6 percent on Wednesday. Earlier in the session, the hit $1,235.16, its highest in more than a week.

U.S. gold futures for August delivery were 0.3 percent lower at $1,228.10 an ounce.

"The rise is partially to do with the that Trump and the EU called a cease fire on trade war and a halt on auto tariffs," said

"But gold has been dropping since April so there is a bigger story behind this fall rather than just the EU-US story at the moment."

Gold is currently trading about 10 percent off its April high due to pressure from a stronger dollar but the U.S. currency moved sideways on Thursday.

Meanwhile, the equity index rose to its highest since March, signalling investor demand for higher risk assets.

"The euro recovery against the greenback has also failed to lift bullion, confirming that there is little investor appetite for the precious at this time," said

Investors are also watching out for the European Central Banks' (ECB) policy meeting, which is due later in the day and second-quarter U.S. economic growth data, which is expected on Friday.

The is all but certain to keep policy on hold on Thursday, arguing that the risks from an amplifying global trade conflict don't warrant a deviation from its plan to gently exit its easy-money policy of the last few years.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund fell 0.29 percent to 800.20 tonnes on Wednesday.

Among other precious metals, silver edged 0.4 percent lower to $15.50 an ounce, after earlier hitting its highest since July 17 at $15.67 an ounce.

Palladium dropped 0.5 percent to $934.50 an ounce. It touched an over one-week high at $941.10 in the previous session.

Platinum was down 0.5 percent at $836.10 an ounce.

(Additional reporting by in Bengaluru; Editing by Jane Merriman)

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

First Published: Thu, July 26 2018. 15:51 IST
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