Mubasher: Gold prices stabilised earlier on Tuesday close to the highest level in one month, as investors sought safe-haven assets amidst an escalating trade tension between the US and China, Reuters reported.
At 6:03 am GMT, spot gold stabilised at $1,298.63 per ounce, after tapping $1,303.26 per ounce, the highest level seen since 11 April, while US gold futures went down to $1,299.40 per ounce.
By 8:45 am GMT, spot gold declined by 0.22% to $1,297.11 per ounce, while gold futures fell 0.30% to $1,297.90 per ounce.
In the prior session, the yellow metal climbed by 1.1%, its biggest one-session rise since 19 February.
Asian equities extended their losses on Tuesday, on the back of overnight Wall Street drops, while the Japanese yen (JPY) rallied.
US Treasury yields inched lower after Beijing on Monday announced tariff hikes on US goods, responding to Washington’s Friday move and ignoring President Donald Trump’s warning against such measure.
“Gold is moving because people are looking to find a safe harbour in the storm while they wait for the dust to settle,” OANDA senior market analyst Jeffrey Halley was quoted by Reuters.
Should stock markets settle lower, the yellow metal could further rise to a range from $1,310 to $1,312 per ounce, Halley said.
In the same vein, market participants were worried that China, the biggest foreign US creditor, may move to dump treasuries to counter the White House’s toughening trade stance.
However, “any sudden breakthroughs in the trade stand-off possibly could see investors stampeding for the exit as fast as they arrived,” the analyst noted.
Investors are keeping a watchful eye on escalating tensions between the US and Iran, after Saudi Arabia announced that two of its oil carriers were among those which were attacked in an assault close to the coast of the UAE.
“The Middle East escalation news brings us a step closer to a significant US military reprisal,” SPI Asset Management trading and market strategy head Stephen Innes was quoted by the news agency.