Gold prices steady amid US-China trade war concerns
London (Sept 12) Gold was steady on Wednesday, failing to break from a narrow trading range as investors remained concerned about a simmering trade war between the United States and China.
Spot gold was off just 0.07 percent at $1,196.70 an ounce at 1002 GMT, after hitting its lowest since Aug. 24 at $1,187.21 on Tuesday.
U.S. gold futures were steady at $1,202.20 an ounce.
The trade conflict between Washington and Beijing has prompted investors to buy the U.S. dollar in the belief that the United States has less to lose from the dispute. "It looks like gold will remain in a sideways trend until something forces it either way," said Commerzbank analyst Daniel Briesemann, adding that given the uncertainty in the world "gold will go much higher before the year is out."
Gold has been stuck in a $20 price range over the past two weeks, with investors looking for technical breakouts for clues on further movements.
Gold has lost out to the dollar in a battle for safe-haven flows. A firmer dollar makes gold more expensive for holders of other currencies but on Wednesday the dollar was marginally lower against a basket of currencies.
In addition, a sell-off in the Chinese yuan made the metal more expensive for buyers from the world's top consumer of the metal.
"Gold is moving without a clear direction and it seems locked between $1,190 and $1,200," said ActivTrades chief analyst Carlo Alberto De Casa.
"Investors are awaiting new moves to see if bullion can prolong the weak recovery seen in the second half of August, even if the main trend still appears bearish."
The U.S. central bank is widely expected to raise benchmark interest rates at its September meeting and expectations are growing for one more hike in December on positive economic data.
Higher rates increase bond yields, making non-yielding bullion less attractive, and tend to boost the dollar.
Central bank meetings in Turkey and Russia this week are also on investors' radar, with particular market focus on whether Ankara will step in to fight inflation and a depreciating currency, Commerzbank's Briesemann said.
Gold has fallen over 12 percent from a peak in April, pressured by rising U.S. interest rates amid intensifying global trade tensions.
Spot silver was up 0.6 percent at $14.18 per ounce, having touched $13.90 in the previous session, its lowest since January 2016.
Platinum was down 0.3 percent to $785 per ounce, while palladium lost 0.6 percent to $969 an ounce.
Reuters
