Gold Prices Edge Higher But Stay Near Yearly Lows

May 22, 2018

London (May 22)  Gold prices were little changed in early dealings on Tuesday, hovering not far off a 2018 low struck in the previous session, as improved appetite for riskier assets sapped demand for the yellow metal.

Comex gold futures were up around 0.1% at $1,291.30 a troy ounce by 4:10AM ET (0810GMT). In the previous session, it slid to as low as $1,281.20, its weakest level since December 27.

Gold's losses on Monday came after a truce between the United States and China calmed fears that a trade war might be imminent.

Washington and Beijing both claimed victory on Monday as the world's two largest economies stepped back from the brink of a global trade war and agreed to hold further talks to boost U.S. exports to China.

That news boosted U.S. equities and Treasury yields, underpinning the dollar as a result and weighing on gold.

Looking ahead, the market is awaiting the minutes of the Federal Reserve's last policy meeting due to be released on Wednesday.

Expectations that the U.S. central bank will lift U.S. interest rates again next month have added to recent downward pressure on gold.

Higher U.S. rates tend to boost the dollar and push bond yields up, make non-yielding assets like bullion less attractive.

Among other precious metals, silver and palladium were both slightly higher at $16.59 an ounce and $991.30 an ounce, respectively.

Platinum rose 0.4% at $903.30 an ounce, after marking a fresh low for the year in the previous session at $873.50.

Meanwhile, copper rose 0.9% to $3.126 a pound on renewed optimism about global growth after the U.S./China agreement.

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