Gold holds steady as dollar slips after US-EU trade talks

Bengaluru — Gold prices held steady on Thursday as the dollar eased after US President Donald Trump and European commission president Jean-Claude Juncker agreed to work towards eliminating trade barriers, easing the immediate concern about global trade tension.

Spot gold was little changed at $1,231.12/oz, as of 4.12am GMT. Earlier in the session, the metal hit $1,235.16, its highest in more than a week.

US gold futures for August delivery were 0.03% lower at $1,231.40/oz. The dollar sagged on Thursday and the euro advanced, as the US and the EU agreed to begin talks towards easing trade barriers on industrial goods. Trump on Wednesday agreed to refrain from imposing car tariffs, while the US and EU launched negotiations to cut other trade barriers, easing the threat of a transatlantic trade war.

“The meeting between the EU president Juncker and President Trump in which they discussed moves to ease trade tensions led to some softening of the US dollar index, which has helped push up gold,” said National Australia Bank economist John Sharma.

“The US-China trade dispute, though, still remains unresolved and is the more challenging one. On gold, it is likely to ebb and flow with US dollar movements, before gaining momentum towards the end of the year,” Sharma said.

Spot gold might break a resistance at $1,237/oz and rise into a range of $1,246-$1,258, Reuters technical analyst Wang Tao said.

Meanwhile, investors are also watching out for the European Central Bank’s (ECB’s) policy meeting, which is due later in the day and the second-quarter US economic growth data, which is expected on Friday. The ECB is all but certain to keep policy on hold on Thursday, arguing that the risks from an amplifying global trade conflict do not warrant a deviation from its plan to gently exit its easy-money policy of the past few years.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF) fell 0.29% to 800.20 tonnes on Wednesday.

In other precious metals, silver edged 0.2% higher to $15.59/oz.

Palladium dropped 0.8% to $931.30/oz and platinum was nearly unchanged at $839.90/oz.

Reuters