Mubasher: Gold prices went up in late Asian trade on Tuesday as the US dollar retreated from multi-week peak, while global economic slowdown concerns and anxieties about the US-China trade talks propped up the yellow metal.
By 8:12 am GMT, US gold futures edged up 0.29% to $1,315.70 per ounce, while spot gold rose 0.31% to $1,312.21 per ounce.
Commodity prices, including gold, were being shored up as the dollar declined, Singapore-based CMC Markets analyst Margaret Yang told Thomson Reuters, adding that the current strength of the greenback is not sustainable amid the US Federal Reserve’s dovish monetary stance.
By 8:14 am GMT, the US dollar index ticked up 0.07% to 97.1290, after retreating from the largest gains since 24 January scored in the previous session.
“There are plenty of uncertainties for traders to worry about this week, including trade talks and Brexit debate, which should support gold prices,” Yang said.
A fresh round of negotiations between the US and China kicked off in Beijing on Monday as both sides trying to reach an agreement ahead of the 1 March deadline when Washington is poised to raise tariffs on $200 billion in Chinese goods to 25% from 10%.
Trade tensions between the world’s two biggest economies have disturbed markets since last year and also pushed up US dollar. Last January, the precious metal fell after reaching a nine-month peak at $1,326.30 per ounce.
A strong dollar meant more expensive greenback-denominated bullion for holders of other currencies.
However, “ongoing trade tensions and concerns about weaker global economic growth continue to provide a level of support in the gold market,” according to analysts at Australia and New Zealand (ANZ) bank.
In addition, investor worries mounted over the economic impact of a potential US government shutdown at the time of a waning global economic growth.
Nevertheless, US congressional negotiators said late Monday that they have reached a provisional agreement on border security funding, which would provide another government shutdown.