LONDON: Gold prices recovered from a nearly seven-month low on Tuesday as the dollar eased but platinum touched fresh 10-year lows on concerns that trade sanctions could hit demand for the metal.
Spot gold was up 0.7 per cent at $1,250.17 an ounce as of 1244 GMT. Earlier in the session, bullion prices dropped to $1,237.32, their lowest since Dec 12, 2017. US gold futures rose 0.7pc to $1,251.30 an ounce.
“The trend of the dollar is bearish for gold but as we start the new quarter we are seeing some dollar profit-taking and that is boosting gold,” Forex.com analyst Fawad Razaqzada said.
He said investors had booked profits ahead of the minutes from a recent US Federal Reserve meeting and US non-farm payrolls data due this week. The dollar index, which measures the greenback against a basket of six major currencies, was 0.4pc lower. A softer greenback generally decreases the cost of dollar-denominated bullion for investors paying in other currencies.
The United States is set to place tariffs on $34 billion of Chinese goods on July 6, but global stocks remained resilient, spurred by tech-driven rises in the United States.
The US Chamber of Commerce on Monday denounced US President Donald Trump’s handling of global trade disputes, issuing a report that argued tariffs imposed by Washington and retaliation by its partners would boomerang badly on the American economy.
Gold can gain in times of uncertainty as it is seen as a safe place to park assets. Analysts warned that the increase in gold on Tuesday did not mark the end of its recent downward trend.
“It appears quite clear that the trend is still bearish for gold and that a first positive impulse could only arrive if prices soar to $1,255,” ActivTrades analyst Carlo Alberto De Casa said.
Silver climbed 0.9pc to $15.97 an ounce, while palladium rose 0.2pc to $948 per ounce. Platinum gained 1.8pc to $830 an ounce.
Published in Dawn, July 4th, 2018