LONDON: Gold hit a one-week high on Wednesday, rebounding from this week’s seven-month low, helped by a softer dollar and smouldering trade tensions, though gains were limited by the prospect that rising interest rates will support the greenback.
“Gold has been trending lower for several weeks and this being non-farm payrolls (week) the dollar is likely to remain in range, so people are taking profit on dollar and gold positions,” said Fawad Razaqzada, an analyst at FOREX.com. “I’m still not convinced we’ve seen the lows so long as gold remains below $1,300.
The dollar is on an upwards trajectory. I don’t think (looming US interest rate) hikes are fully priced into the dollar or gold.”
Spot gold was up 0.2 per cent at $1,255.21 an ounce as of 1114 GMT after touching $1,261.10, a one-week high. The yellow metal has gained over $20 from Tuesday’s low of $1,237.32 an ounce, its weakest since Dec. 12. US gold futures for August delivery were trading 0.2pc higher at $1,256.30 an ounce.
Investors are now looking to minutes of the June US Federal Reserve meeting due on Thursday and the US non-farm payrolls data on Friday for further cues on monetary policy.
World stocks were dragged lower meanwhile by growing anxiety ahead of Washington’s end of week deadline to impose tariffs on $34bn of Chinese imports, and Beijing’s vow to retaliate in kind on the same day.
Silver was 0.1pc lower at $15.98 an ounce and palladium gained over 0.8pc to $946.15. Platinum was flat at $837.20 an ounce. The metal fell on Tuesday to the lowest since December 2008 at $793. US markets will remain closed on Wednesday for the Independence Day holiday.
Published in Dawn, July 5th, 2018