Intensifying tension between the US and China lifts gold
Bengaluru — Gold prices rose on Tuesday, supported by safe-haven buying, as an escalating trade spat between the US and China sparked a sell-off in equity markets.
Spot gold was up 0.45% at $1,283.62/oz by 3.36am GMT. US gold futures for August delivery were also 0.5% higher at $1,286.10/oz. The US dollar and Asian stocks extended a global downturn after President Donald Trump threatened to impose a 10% tariff on $200bn of Chinese goods in an escalating tit-for-tat trade war between the world’s two biggest economies.
The dollar was down 0.3% against a basket of major currencies at 94.548, as well as hitting a one-week low versus the yen. Asian shares outside Japan slid 1% to their lowest level in more than four months.
"There is a bit of panic as investors are looking for cover, especially from equity market, and as we know gold does offer that hedge," said Stephen Innes, Asia-Pacific trading head at Oanda.
Gold prices can gain during times of financial and political uncertainty as the metal is seen as a safe place to park assets, alongside the Japanese yen.
Spot gold might bounce moderately to resistance at $1,290/oz and then retest support at $1,277/oz, said Reuters technicals analyst Wang Tao.
Meanwhile, in other precious metals, silver climbed 0.5% to $16.48/oz, after hitting its lowest since June 5 at $16.39 in the previous session.
Platinum rose 0.1% to $882.50/oz, having dropped to a four-week low on Monday.
Palladium was down 0.2% at $987.81/oz, after marking its lowest since June 5 at $979.99 overnight.