Gold is little changed amid steady dollar

Bengaluru — Gold prices were little changed on Wednesday, after slipping to a near six-month low in the previous session, amid a steady dollar and firmer equities.

Spot gold held steady at $1,273.92/oz, as of 3.31am GMT. The metal fell to its lowest since December 22 at $1,270 on Tuesday.

US gold futures for August delivery were, however, 0.2% lower at $1,276/oz.

Gold prices generally gain momentum during times of uncertainty as it is considered a safe place to park assets.

OCBC analyst Barnabas Gan said that gold was not doing its part as a safe-haven asset. The dollar-yen and even the US treasuries were playing that role rather than gold, said Gan.

The dollar steadied against the yen on Wednesday, as US yields pulled back from lows hit on concern about a worsening trade feud between Washington and Beijing, although persistent worry about the trade rift is likely to cap any greenback recovery.

China’s stock markets slumped on Wednesday, extending a rout from the previous day as the prospect of a full-blown China-US trade war put a dampener on the rest of Asian equities, even as they managed a modest bounce.

Spot gold might test a support at $1,268/oz, with a good chance of breaking below this level and falling more towards the next support at $1,258, said Reuters technicals analyst Wang Tao.

Meanwhile, European Central Bank (ECB) president Mario Draghi said the bank would be patient in tightening policy further, adding that market pricing for its first post-crisis rate hike were consistent with its aim to move gradually.

A lone Bank of Japan (BoJ) policy maker said additional easing was needed to accelerate inflation, but most members wanted to keep monetary policy unchanged, minutes from the central bank’s policy meeting in April showed on Wednesday.

In other precious metals, silver rose 0.2% to $16.31/oz. In the previous session, it hit $16.21, its lowest since May 16.

“Investors are increasingly concerned that metals, which are used in autocatalysts, are at risk of being dragged into the trade conflict between the US and China,” ANZ said in a note.

Platinum slipped 1.2% to $857.10/oz. Earlier in the session, it touched $855.25, its lowest since February 3 2016.

Palladium was nearly unchanged at $967/oz, after marking its lowest since May 21 at $964.20 on Tuesday.

Reuters