Gold Refinery gold shavings. Picture: AFP PHOTO/OZAN KOSE
Gold Refinery gold shavings. Picture: AFP PHOTO/OZAN KOSE

Bengaluru — Gold inched up on Thursday as investors bought the safe-haven metal on doubts about whether the US and China will seal a trade deal after President Donald Trump signed a legislation supporting Hong Kong protesters.

Palladium retreated slightly after hitting an all-time peak of $1,836.61 earlier in the session.

Spot gold was up 0.1% at $1,456.22/oz by 4.06am GMT. US gold futures rose 0.1% to $1,455.20.

Trump on Wednesday signed legislation into law that requires the State Department to certify, at least annually, that Hong Kong retains enough autonomy to justify favourable US trading terms. Beijing condemned the move and said it would take “firm counter measures”.

Trump’s approval of the bill is casting further uncertainty over the China-US trade deal, which has been the main driver of gold prices, said John Sharma, an economist at National Australia Bank. Asian share markets wavered, while the safe-haven yen rose against the dollar on concerns that the protracted tariff dispute between the world’s two biggest economies could become more complicated.

Gold had eased 0.5% in the last session on a raft of upbeat economic data from the US. Economic growth picked up slightly in the third quarter, weekly jobless claims fell, while new orders for key US-made capital goods increased by the most in nine months in October.

“Global growth concerns have definitely eased, but not gone,” Sharma said, adding gold will remain supported even if an interim deal is passed since the most complex issues, such as intellectual property, have been pushed down the road.

Gold, considered a safe store of value during economic or political uncertainties, has gained more than 13% in 2019, mainly due to the tariff dispute and its effect on global growth.

Among other precious metals, palladium shed 0.3% to $1,827.59/oz, retreating slightly after touching a record high. The autocatalyst metal used in vehicle exhaust systems to reduce harmful emissions has risen about 44% so far in 2019 on a supply crunch.

“Strong demand from China and sluggish supply growth have tightened palladium’s physical market this year, causing a substantial drawdown of palladium-backed ETFs (exchange traded funds),” ANZ said in a note.

“Increasingly bullish investors are, however, now dragging the metal back into ETFs, so increasing speculative interest could add another dimension to the current rally.”

Palladium ETFs tracked by Reuters have steadily declined in 2019. Platinum was up 0.1% at $893.13/oz and silver rose 0.2% to $16.98/oz.