Bengaluru — Gold prices were steady in early Asian trade on Friday, amid renewed fear of a global trade war.
A firm dollar and positive US economic data weighed on the market.
Spot gold was nearly unchanged at $1,298.20 an ounce by 3.56am GMT, while US gold futures for June delivery were down 0.2% at $1,298/oz. Spot gold is down slightly this week.
The dollar index, which measures the greenback against a basket of six major currencies, was up 0.1% at 94.117.
Gold’s current price movement reflected the relatively calm attitude of investors, said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.
“These uncertainties are to be with us for quite some time, so sooner or later investors will get used to it,” To said. He expected gold to trade in the $1,296-$1,305 range.
Fear of a global trade war emerged after the US on Thursday went ahead with tariffs on aluminium and steel imports from Canada, Mexico and the European Union, ending the two-month exemption it had given earlier.
Canada and Mexico retaliated against this decision.
Meanwhile, US President Donald Trump on Thursday played down the chances of a quick deal in getting North Korea to abandon its nuclear arms.
A delegation from Pyongyang headed to meet him with a letter from North Korean leader Kim Jong-un, suggesting a proposed summit may be back on.
Wing Fung’s To said political and economic tension could support gold prices to a certain extent, but an interest rate hike from the US Federal Reserve this month could provide some kind of resistance.
US consumer spending accelerated in April and inflation continued to rise steadily, underpinning the case for a US interest rate hike this month.
Higher interest rates tend to boost the dollar and push bond yields up, pressuring gold prices by increasing the opportunity cost of holding non-yielding bullion.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.52% to 847.03 tonnes on Thursday.
In other precious metals, spot silver gained 0.5% to $16.42 an ounce, but was down about 0.5% this week.
Platinum rose 0.6% to $906.60/oz and palladium was 0.1% higher at $986/oz. Both were headed for a second straight weekly gain.