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Gold steady but lacks upside momentum despite trade war fears

Reuters  |  LONDON 

By Maytaal Angel

LONDON (Reuters) - Gold steadied on Thursday as the dollar came off the boil, though the market lacked direction and seemed unable to capitalise on escalating trade tensions.

Stock markets and commodities regained some poise after a turbulent session on Wednesday when the ratcheted up trade war threats on China, while the dollar held at a nine day high. [FRX/] [MKTS/GLOB]

The dollar's failure to push ahead, especially against the euro, is viewed by some market watchers as a sign it may have peaked for now as the Federal Reserve might slow its cycle of rate increases if stocks fall sharply.

A weaker dollar makes dollar-priced gold cheaper for non-U.S. investors who make up the bulk of gold buyers.

"The (gold) market is lacking direction and very technical in its characteristics," said Alasdair Macleod, at

Looking ahead however, he said: "Gold could go marginally better. There are signs that the U.S. economy may be slowing down a bit and if that's so, we can expect the Fed to take its foot off the interest rate pedal a bit."

Spot gold was up 0.2 percent at $1,244.95 at 1021 GMT. In the previous session, it slipped 1 percent to hit its lowest in over a week at $1,240.89.

U.S. gold futures for August delivery were flat at $1,244 an ounce.

Investors are looking to U.S. consumer inflation data due later for further clues on the Fed rate outlook, with the biggest annual increase in 6-1/2 years in June U.S. price setting the scene for an upside surprise.

Elsewhere, focus was still on what the next steps in the tit-for-tat trade conflict might be. has accused the of bullying and warned it could hit back, although the form of retaliation is not yet clear.

Investors often turn to bullion as a safe haven in times of political uncertainty, but have not done so this time around.

"We cannot understand the weakness of the gold price in view of the risks - especially the trade war. However, if gold falls below last week's low, the psychologically important $1,200 mark could be tested," said in a note.

Silver was 0.7-percent higher at $15.85 an ounce. Earlier in the session it fell to its lowest since mid-December at $15.72 an ounce.

Platinum was up 0.3 percent at $827.25 an ounce, after falling to a more than one week low at $821.25 earlier, while palladium was 0.3 percent higher at $938.98 per ounce.

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

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, July 12 2018. 17:05 IST
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