Uncertainty about trade and growth keeps gold price buoyant
Precious metal scales a one-week peak above $1,516
Bengaluru — Gold prices scaled one-week highs on Thursday, holding ground above $1,500/oz as investors flocked to the safety of bullion after contradictory reports about Sino-US trade talks.
Spot gold gained 0.2% to $1,508.82/oz as of 4.12am in London, having notched a one-week peak of $1,516.77 early in the session. US gold futures inched 0.1% higher to $1,514.
“There is a possibility that trade talks may not have good results, and the bottom line is it will take long. So you may want to buy gold,” said Argonaut Securities analyst Helen Lau, adding that some volatility could be expected in the market.
The New York Times reported Washington will soon issue licences allowing some US firms to supply non-sensitive goods to China’s Huawei Technologies, while Bloomberg reported the White House is looking at rolling out a previously agreed currency pact with China.
Asian stocks came off early lows as some reports raised hopes that the US and China would settle some economic disputes.
The South China Morning Post reported the Chinese delegation was planning to leave Washington after just a day of minister-level meetings, instead of as planned on Friday.
Gold is often used by investors as a hedge against political and financial uncertainty.
Holdings in gold exchange-traded funds (ETFs) “are at three-year highs and lots of central banks are also buying, which is keeping prices supported”, Lau added.
Indicative of investor interest, holdings of the SPDR Gold Trust, the world’s largest gold-backed ETF, have been at their highest since November 2016.
Spot gold looks neutral in a range of $1,488-$1,514 and an escape could suggest a direction, said Reuters technical analyst Wang Tao.
“Global trade uncertainties along with subdued global growth will remain supportive towards safe-haven assets in the current term,” Phillip Futures analyst Benjamin Lu said in a note.
Among other precious metals, silver rose 0.8% to $17.84/oz, palladium dropped 0.2% to $1,679.03 and platinum eased 0.1% to $890.71.