Gold slips

12 Jun, 2019 - 00:06 0 Views
Gold slips

The Herald

Gold fell to a one-week low yesterday as the United States halted its plans to impose tariffs on Mexico, boosting appetite for riskier assets like equities at the expense of alternatives like bullion.

Spot gold was down 0,4 percent at $1,322.39 per ounce as of $1,322.39 GMT, having earlier hit its lowest since June 4 at $1,320.75. US gold futures fell 0,2 percent to $1,326.1 an ounce.

Concerns over global trade and expectations the Federal Reserve would cut US interest rates sent spot prices to their highest since April 2018 last week at $1,348.08.

Bullion lost more than 1 percent on Monday after markets took heart from a deal between the United States and Mexico to avert yet another tariff war.

However, US Secretary of State Mike Pompeo warned on Monday the US could still slap tariffs on Mexico if not enough progress was made on its commitment to stem illegal immigration.

“The outlook for the world economy has not changed and that leads us to believe that the upside is still intact, but the (gold) market needs weaker stocks and a weaker dollar to see that through,” Saxo Bank commodity strategist Ole Hansen said.

“Right now stocks are not weakening and that’s creating profit-taking,” he said.

“The continued recovery in stocks is leading
to recent established longs (in gold) being
closed.”

European shares rose after the latest trade news, though US President Donald Trump said he was ready to impose another round of tariffs on Chinese imports if he cannot make progress in trade talks at a Group of 20 summit later this month.

Gold also held above key technical levels as rising expectations for a US rate cut kept the dollar pegged near a 2-1/2 month low against a basket of major currencies.

“We remain cautiously constructive on gold despite Monday’s decline as we have to suspect that the trend of a lower dollar and depressed global interest rates will continue to stay in place for some time,” INTL FCStone said in a note.

Among other precious metals, silver rose 0,2 percent to $14,69 per ounce, while platinum
was up 0,3 percent to $804,46 an ounce. Reuters.

 

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