Gold price pares losses from 19-month low as US dollar softens
New York (Aug 16) Gold pared heavy early losses that came in the midst of a broad commodity sell-off on Thursday, bouncing off of a 19-month low on short covering and a softer US dollar following news that Beijing will hold trade talks with Washington this month.
Spot gold was down 0.2 percent at $1,172.48 an ounce as of 0426 GMT, after earlier falling as much as 1.2 percent to $1,159.96, its lowest since January 2017.
US gold futures were down 0.5 percent at $1,179.5 an ounce.
Stop-loss selling early in the session pushed prices sharply lower, and it has recovered since on short-covering and physical buying, said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
Bullion has lost its appeal as a safe-haven over the past few months as investors have preferred to park assets in US Treasuries and dollar amid the uncertainty caused by the China-US trade dispute.
The dollar was nudged away from a 13-month peak on Thursday, though, as risk aversion eased and emerging market currencies recovered on news that a Chinese delegation will travel to the United States late in August for trade talks.
Asian shares also pulled away from one-year lows after news of the trade talks, although Turkey’s currency crisis and fears of an economic slowdown in China kept most markets in the red.
In an ongoing dispute with Turkey, which has roiled financial and currency markets, the United States on Wednesday ruled out removing steel tariffs, even if Ankara frees a US pastor, as Qatar pledged $15 billion in investment to Turkey, supporting a rise in the Turkish lira.
Some emerging market countries pared their holdings of US Treasuries in June, data from the US Treasury department showed on Wednesday, in what analysts viewed as a move to support their currencies as the Federal Reserve started raising interest rates this year.
Higher US rates tend to boost the dollar and bond yields, adding pressure on greenback-denominated, non-yielding gold.
DailyTimes
