Gold slips to near two-month low

Bengaluru — Gold prices fell to a near two-month low on Tuesday, weighed down by a stronger dollar, while hopes of progress in the US-China trade talks lifted equity markets in a further hit to the bullion’s appeal.

Trading was thin in Asian hours as traders in top consumer China went for a public holiday.

Spot gold was down 0.4% at $1,465.80 an ounce, as of 4.56am GMT, after declining to its lowest since August 6 at $1,462.44 earlier in the session. US gold futures were 0.1% lower at $1,471.80 an ounce.

The dollar’s potential to gain further and optimism about a potential trade deal between Washington and Beijing weighed on gold, said Michael McCarthy, chief market strategist at CMC Markets.

“We also broke through the $1,480-$1,490 support level and on a technical basis that in itself is enough to spur further selling,” he said.

The dollar index against a basket of six currencies climbed to a more than two-year high, as investors waited for September US manufacturing data to determine how far policymakers will go to bolster growth.

Asian shares ticked up as some investors clung to hopes that the fourth quarter will bring progress in resolving the US-China trade war that has cast a shadow over the global economy.

White House trade adviser Peter Navarro dismissed reports that the US administration was considering delisting Chinese companies from US stock exchanges.

China and the US are due to resume high-level trade talks next week in Washington. While the tussle over trade and technology between the world’s two largest economies has intensified, some investors are sticking to hopes of a compromise.

“We’re unlikely to see this rather complex and difficult situation resolve any time this year. If both sides appear to accept a partial settlement that could be good news,” McCarthy said.

On the technical front, spot gold may break a support at $1,462 an ounce and fall towards $1,446, according to Reuters analyst Wang Tao.

Holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.22% to 920.83 tons on Monday.

Among other precious metals, deficit-hit palladium was little changed at $1,675.29 an ounce, having scaled a record peak of $1,700.71 on Monday.

Platinum was down 0.1% at $881.37 an ounce. Silver was 0.1% lower at $16.97, after hitting its lowest since August 20 at $16.87 earlier in the session.

Reuters