Gold wobbles on firmer dollar
Metal slips as the greenback is boosted by safe-haven demand as investors watch US-China tensions amid heightened risk aversion
Bengaluru — Gold prices eased slightly on Wednesday as the dollar was boosted by safe-haven demand as investors eyed US-China tensions amid heightened risk aversion.
Spot gold dipped 0.1% to $1,220.36/oz at 4.35am GMT.
US gold futures were flat at $1,220.70/oz.
The dollar firmed against its major peers on Wednesday, as investors shunned riskier assets in favour of safe-haven currencies on heightened concerns about slowing global growth and the US-China trade war.
The dollar index was steady after it gained about 0.7% in the previous session, pulling away from a two-week trough of 96.042. Asian stocks fell, weighed down by a renewed bout of selling on Wall Street.
“The US dollar increase will continue the headwinds for gold purely because gold is a dollar-denominated commodity,” said Argonaut Securities analyst Helen Lau.
“In the near-term people will start pricing in the ongoing turbulence in the equity markets so that should be supportive for gold,” Lau said.
The metal has fallen about 10% since hitting a peak in April as investors bought the dollar with the US-China trade war unfolding against a background of higher US interest rates.
Investors are now keeping a close eye on the Group of 20 (G20) leaders’ summit in November in Argentina where US President Donald Trump is expected to meet Chinese President Xi Jinping to discuss the bilateral trade dispute.
The Trump administration on Tuesday said that China has failed to alter its “unfair” practices at the heart of the US-China trade conflict.
Spot gold is expected to test a support at $1,211/oz, with a good chance of breaking below this level and falling more to $1,202, said Reuters technical analyst Wang Tao
Among other precious metals, silver was down 0.2% at $14.29/oz. Silver hit its highest level since November 8 at $14.49 in the previous session.
Palladium was little changed at $1,140.70/oz, while platinum was up 0.4% at $841.10/oz.
Trading volumes are expected to remain subdued ahead of the US Thanksgiving holiday on Thursday.