Gold ticks up as dollar eases, and US-China trade tension rises

Bengaluru — Gold prices edged higher on Thursday, as the dollar eased from six-and-a-half-month highs hit earlier this week, with prices further supported by concern over US-China trade.

Spot gold was up 0.1% at $1,302.50 an ounce by 3.44am GMT. It was headed for a monthly decline of about 1%, its biggest since February.

US gold futures for June delivery were 0.1% higher at $1,303.20 an ounce.

“Gold is largely being influenced by how the dollar is moving, and the dollar move overnight is a clear representation of why gold prices have risen this morning,” OCBC analyst Barnabas Gan said.

The dollar index, which measures the greenback against a basket of six major currencies, fell 0.1% to 94.027. A weaker dollar makes bullion cheaper for holders of other currencies.

“Prices are still very dependent on how risk aversion is playing up and the global news surrounding the US-Sino trade tensions as well as the possibility of a North Korea summit, that uncertainty is a big driver for gold prices,” Gan said.

China said on Wednesday it was ready to fight back if Washington was looking for a trade war, days ahead of a planned visit by US Commerce Secretary Wilbur Ross.

Meanwhile, US and North Korean officials met in New York late on Wednesday in the first of two days of talks about the future of Pyongyang’s nuclear weapons programme and a possible summit between US President Donald Trump and North Korean leader Kim Jung-un.

“Some weaker than expected economic data in the US also helped boost investor demand (for gold),” ANZ said in a note.

US economic growth slowed slightly more than initially thought in the first quarter as consumer spending rose at its weakest pace in nearly five years.

However, tension over Italy cooled as the country’s two main anti-establishment parties renewed efforts to form a government, reducing the prospect of a general election, which had stoked fears that such a vote will effectively be a referendum on the country’s euro membership.

In other precious metals, spot silver was steady at $16.51 an ounce, set to rise over 1% this month.

Platinum fell 0.2% to $904.94 an ounce but was headed for a small monthly gain.

Palladium was steady at $985.40 an ounce and was headed for its biggest monthly gain since December, climbing more than 2%.