Firm dollar keeps gold range-bound

Bengaluru — Gold traded in a tight $3 range on Friday as concerns over an economic slowdown supported prices for the safe-haven metal and a firm dollar kept a lid on gains.

Investors are also awaiting further developments from ongoing US-China trade talks before making any big moves.

Spot gold was steady at $1,312.56/oz as of 4.19am GMT, while US gold futures were up 0.1% at $1,315.40.

“Uncertainties around Brexit and trade talks and strengthening of the dollar are capping gold prices,” said Brian Lan, MD at dealer GoldSilver Central in Singapore.

“Until there is resolution to these global concerns we might see gold prices range bound between $1,305 and $1,326.”

The dollar measured against six of its peers was up 0.1% at 97.04, after weakening by 0.12% in the previous session.

Two White House negotiators will meet with Chinese President Xi Jinping later on Friday, but there has been no decision to extend a US deadline for a deal by March 1, US President Donald Trump’s economic adviser, Larry Kudlow, said on Thursday.

US tariffs on $200bn worth of imports from China are scheduled to rise to 25% from 10% if the two sides don’t reach a deal by then.

“We are now in a very tight range. People are waiting for bigger [events] to move the market,” said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank.

Weak US retail sales data will be a good reason for the US Federal Reserve not to raise interest rates, which is good for gold prices, he said.

Sombre US retail sales fanned concerns of slowing economic momentum in the world’s largest economy, while an unexpected increase in the number of Americans filing claims for unemployment benefits last week and a second consecutive monthly decline in producer prices in January dimmed investor sentiment.

Gold had gained 0.5% in the previous session, its biggest intraday gain since January 30, as weak US economic data increased the expectation that the US Federal Reserve would stick to its dovish stance on monetary policy.

Outside of the US, British Prime Minister Theresa May suffered another defeat on her Brexit strategy on Thursday, adding to worries that the UK is on course to leave the EU on March 29 without a deal.

In other precious metals, palladium was unchanged at $1,415.00/oz. The metal was still on track for a second consecutive weekly gain, up about 0.7% so far.

Platinum fell 0.8% to $779.50/oz, while silver slipped fell 0.3% to $15.57, and almost 2% this week.

Reuters