Gold Prices Hold Firm On Trade, Growth Concerns
London (Aug 12) - Gold prices held steady in holiday-thinned trade on Monday, trading near the psychological $1,500 level, as uncertainties around the Sino-U.S. trade war and concerns about slowing global economic growth offered support.
Spot gold was little changed at $1,496.20 per ounce at 0556 GMT.
U.S. gold futures were flat at $1,508.30 an ounce.
Many markets in Asia, including Singapore and Japan, were closed for a holiday on Monday.
On Friday, U.S. President Donald Trump said he was not ready to make a deal with China and even called the September round of trade talks into question.
“One risk to higher gold prices has been resolution in the U.S. -China trade talks, so the comment made by Trump on Friday clearly diminishes the likelihood of resolution anytime soon,” said ANZ analyst Daniel Hynes.
White House trade adviser Peter Navarro said the United States was still planning to hold another round of trade talks with Chinese negotiators.
Last week, Washington also accused China of being a currency manipulator after Beijing allowed the yuan to slip below 7 to the dollar.
The escalation in the trade war between the world’s biggest two biggest economies has triggered a strong rally in gold prices, which have risen nearly 6% so far this month.
“If we see continuation in the trade war, the outlook for gold remains positive; we do see prices stabilising around above $1,500. In the near-term, there is every likelihood that we will continue see gold prices push higher,” Hynes said.
Worries about the damaging effects of the row were underscored by a warning from Goldman Sachs of the rising risk of a recession, and that it no longer expects a trade deal before the 2020 U.S. presidential election.
Also pointing to an economic slowdown, data last week showed the British economy unexpectedly shrank for the first time since 2012 in the second quarter, while German industrial production suffered its biggest annual decline in nine years.
Hedge funds and money managers raised their bullish stance in COMEX gold and trimmed net long positions in silver contracts in the week to Aug. 6, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Among other precious metals, silver eased 0.3% to $16.90 per ounce.
Platinum was steady at $858.92, while palladium gained 0.3% to $1,426 an ounce.
Reuters
