Gold prices rose yesterday after hitting a one-week low in the previous session, as worries over US-China trade war flared up, curbing risk appetite and increasing the appeal of safe-haven bullion. Spot gold was up 0,7 percent at $1 335,34, as of 0724 GMT, after falling to its lowest since June 3 at $1 319,35 in the previous session.
US gold futures were up 0.6 percent at $1 339 an ounce.
“Market sentiment this morning is very cautious and risk appetite has started to diminish gently, therefore we see a little bit of buying in gold,” said Benjamin Lu, an analyst with Singapore-based Phillip Futures.
Asian stock markets drifted lower as both warring factions in the Sino-US trade tussle engaged in another round of heated exchanges.
US President Donald Trump defended the use of tariffs as part of his trade strategy, while China vowed a tough response if Washington insists on escalating trade tensions amid ongoing negotiations.
Trump also emphasised that he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees again to four or five “major points,” which he did not specify.
“Gold remains bid as the main dispute between US and China remains unresolved. If there is no sit down between leaders at the G20 meeting, the metal will rise as investors will be on the lookout for a safe haven,” Alfonso Esparza, a senior market analyst at OANDA, said in a note.
Sources said there has been a lack of preparatory work for the meeting, due largely to the increasing acrimony. The trade negotiating teams have not met since talks ended in stalemate on May 10.
Gold bulls are also optimistic of an interest rate cut by the US Federal Reserve.
Trump, a long-term advocator of rate cuts, said on Tuesday interest rates were “way too high” and the central bank had “no clue”.
South Africa’s rand edges weaker in subdued start to trade. — Reuters.