Gold steady as dollar loses steam

Bengaluru — Prices were steady on Wednesday as a weaker dollar offset pressure on the metal, which recovered from a four-week low in the previous session, while a rally in equities to multi-month highs capped bullion’s safe-haven demand.

Spot gold was flat at $1,292.48/oz as of 03.54 GMT, having touched its lowest level since March 7 at $1,284.76/oz in the previous session. US gold futures firmed 0.1% at $1,296.90/oz.

“There won’t be much movement in gold prices as stocks have gone up to their highs in Asia and investors are not seeing gold as a good safe-haven,” said Brian Lan, MD at dealer GoldSilver Central in Singapore.

Asian shares climbed to seven-month highs as investors lapped up signs of progress in US-China trade talks and brisk economic data.

Markets drew hope from White House economic adviser Larry Kudlow, who on Tuesday said the two countries “expect to make more headway” in trade talks this week.

US trade representative Robert Lighthizer and treasury secretary Steven Mnuchin are due to resume talks with Chinese Vice-President Liu He later on Wednesday.

The dollar index, which had secured preference over gold on the backdrop of US-China trade tensions, was weaker at about 0.2% , after climbing a three and a half week peak in the previous day.

A weaker dollar tends to make gold cheaper for holders of other currencies.

The market is also closely following developments around Britain’s departure from the EU. Prime Minister Theresa May said on Tuesday she would seek another Brexit delay to agree an EU divorce deal with opposition Labour leader Jeremy Corbyn.

“Brexit is approaching some conclusion; in the least, this should weaken the dollar against both the sterling and the euro and perhaps give gold a bit of a lift,” INTL FCStone analyst Edward Meir wrote in a note.

Signifying investor sentiment toward bullion, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell to their lowest since March 8 at 768.10 tons on Tuesday.

Among other precious metals, spot palladium was up 0.4% at $1,434.55/oz.

Silver gained 0.3% to $15.16/oz having touched its lowest level since late December at $14.90/oz in the previous session, while platinum rose 1.1% to $851.15.

Reuters