Gold jewellery. Picture: AFP PHOTO/NOAH SEELAM
Gold jewellery. Picture: AFP PHOTO/NOAH SEELAM

Bengaluru — Gold prices inched up on Friday, set to rise for the second consecutive week, on safe-haven demand for the metal ahead of the Group of 20 (G20) summit next week where the leaders of the US and China are set to discuss their trade dispute.

Spot gold was up 0.1% at $1,227.90/oz at 4.39am GMT. The metal was up about 0.5% after a 1% gain last week.

US gold futures edged 0.1% higher at $1,228.9/oz.

President Xi Jinping is due to hold talks with US President Donald Trump at the G20 meeting that starts on November 30 in Argentina to reconcile their trade dispute.

The US is set to raise its tariffs to 25% on $200bn of Chinese imports on January 1 from 10% currently. Trump has also threatened to impose tariffs on all Chinese imports unless US demands are addressed.

“Investors are stepping in to hedge some of the possible tail risk from the G20 meeting next week,” said Stephen Innes, Asia-Pacific trading head at Oanda in Singapore, adding that the weaker dollar and US Federal Reserve’s rate outlook are also supporting gold prices.

The dollar index, which measures the greenback against a basket of six major currencies, fell and is drifting lower after reaching a 16-month high of 97.69 in November.

The dollar declined as a potential global economic slowdown raised doubts about the pace of interest rate increases by the Fed next year.

“A good sizeable portion of the investment community is looking to position long on gold and that has compounded with the fact that the Fed has turned somewhat dovish,” Innes said.

Investor interest in bullion was reflected in holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, which rose on Wednesday to their highest since the end of August.

Spot gold may test a support at $1,211/oz, as it is peaking around a resistance at $1,231, said Reuters technical analyst Wang Tao.

Among other precious metals, silver was up 0.3% at $14.50/oz.

Platinum edged 0.1% lower at $843.30/oz, while palladium was down 0.2% at $1,150.74/oz. The metal was headed for its biggest weekly percentage decline since the week of July 20, down about 2.3% so far.