Picture: BLOOMBERG/CREATIVE PHOTOS
Picture: BLOOMBERG/CREATIVE PHOTOS

Bengaluru — Gold prices edged lower on Tuesday while investors awaited clues on the pace of future US interest-rate hikes and as the US-China trade spat sours ahead of a Group of 20 (G20) summit.

Spot gold inched 0.1% lower to $1,221.70 per ounce at 3.37am GMT.

US gold futures were little changed at $1,222.1 per ounce.

Investors will hold steady until the minutes of the Federal Reserve meeting are released and more clarity emerges around the trade conflict leading into the G20 summit, ANZ analyst Daniel Hynes said.

In an interview with the Wall Street Journal, US President Donald Trump said he expected to move ahead with raising tariffs on $200bn in Chinese imports to 25% from the current 10%, and repeated his threat to slap tariffs on all remaining imports from China.

The comments ran counter to recent speculation about a possible deal when Trump meets Chinese President Xi Jinping at the G20 summit in Buenos Aires later this week.

"When these concerns have elevated, investors have tended to seek haven in the US dollar itself rather than gold. It has been an issue plaguing the gold market for a while now," Hynes said.

Gold prices have lost more than 10% from their April peak as investors turned to the dollar as a safe haven with the trade war unfolding against a backdrop of higher US interest rates.

The dollar index held gains on Tuesday and hovered near its highest level since November 15.

Investors also awaited Fed chair Jerome Powell's speech and minutes from Fed's November 7-8 meeting, due later this week, which is likely to indicate the pace of interest rate hikes in 2019.

Slowing global growth has raised expectations the Fed may halt its tightening cycle sooner than previously expected.

Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding nonyielding bullion. They also boost the dollar, in which the metal is priced.

Indicative of investor sentiment toward bullion, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.15% to 761.74 tonnes on Monday.

Meanwhile, hedge funds and money managers cut their net short positions in Comex gold and silver contracts in the week to November 20, the US Commodity Futures Trading Commission (CFTC) said on Monday.

Among other precious metals, spot silver was down 0.1% at $14.22 per ounce.

Spot platinum was up 0.3% at $842.50 per ounce while palladium rose 0.2% to $1,143.50. 

Reuters