Gold loses ground as dollar steadies
The metal slips amid signs of easing trade tensions between the US and China, while palladium rises to a record high
Bengaluru — Gold prices slipped on Thursday as the dollar steadied and equities climbed on signs of easing trade tensions between the US and China, while palladium rose to a record high, trading at a premium to the bullion.
Spot gold was down 0.2% at $1,243.91/oz, as of 4.15am GMT, while US gold futures were 0.1 percent lower at $1,249.30/oz.
“Market sentiment is neutral today.… We’ve got a little more positive sentiment than we anticipated from US-China trade tensions, which is weighing on the topside,” said Stephen Innes, Asia-Pacific trading head at Oanda in Singapore.
“Dollar hasn’t made much moves and that's the real signpost for gold as they are still highly correlated.”
The dollar index, which measures the greenback against six major rivals, was steady at 97.069, after retreating from a near one-month high overnight.
Meanwhile, Asian shares advanced on signs of easing trade tensions between the world's top two economies, and the expectation that China will step up efforts soon to support its cooling economy.
China appears to be easing its hi-tech industrial development push, dubbed “Made in China 2025”, which has long irked the US, while it also made its first major US soybean purchases in more than six months on Wednesday.
Investors seem more interested in equity at this point of time than in gold, said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
However, analysts see uncertainties around the Brexit deal and the expectation of the US Federal Reserve's dovish tone at its meeting next week, supporting the yellow metal.
“We are still gonna have a lot of noise coming out of Brexit and that should definitely keep gold bid for a while,” Innes said.
Markets are not expecting more than one rate hike from the US central bank next year, after a likely interest rate increase at the Federal open market committee meeting on December 18-19.
Spot gold looks neutral in a range of $1,240/oz-$1,253/oz, and an escape could suggest a direction, said Reuters technical analyst Wang Tao.
Among other precious metals, spot palladium was down 0.2% at $1,258.90/oz, having touched a record high of $1,264.25 earlier in the session.
Palladium rose strongly on the news that China would be reducing tariffs on US imported autos, raising hopes that the sector would be boosted by additional demand, analysts at ANZ said in a note.
Silver was up 0.1% at $14.75/oz, while platinum climbed 0.3% to $800.49.