Gold dips to two-week low on recovery hopes
By Brijesh Patel (Reuters) - Gold dropped to its lowest in two-weeks on Wednesday as hopes of quick economic recovery drove investors towards riskier assets, although U.S.-China tensions over Hong Kong put a floor under bullion prices. Spot gold was down 0.6% at $1,700.30 per ounce by 1223 GMT.
By Brijesh Patel
(Reuters) - Gold dropped to its lowest in two-weeks on Wednesday as hopes of quick economic recovery drove investors towards riskier assets, although U.S.-China tensions over Hong Kong put a floor under bullion prices.
Spot gold was down 0.6% at $1,700.30 per ounce by 1223 GMT. U.S. gold futures fell 0.8% to $1,691.80.
"It's very important for gold prices to stay above $1,700. Otherwise, if the price correction continues, speculative investors are likely to leave this boat and increase pressure on prices," said Commerzbank analyst Eugen Weinberg.
"One can mention the geopolitical tensions are contributing somewhat and supporting gold prices currently. But, until now this situation has failed to ignite fears on the equity market."
Optimism about the development of coronavirus vaccines and a revival of business activity has lifted risk sentiment in the financial markets.
After a batch of poor economic readings from the United States, data on Tuesday showed U.S. consumer confidence nudged up in May and new home sales beat expectations.
Despite the pullback in bullion prices, the outlook remains positive for gold, which is seen as a safe-haven asset during times of political and economic uncertainty, analysts said.
The risks of a temporary short-term gold market unwind to a low- to mid-$1,600 level seems to be rising, Citi said in a note, adding it remained "outright bullish (on) gold over the medium term and forecast that $2,000 ounce will be breached in the next 12 months".
Growing political unrest in Hong Kong over Beijing's proposed national security laws has kept investors on edge.
U.S. President Donald Trump said Washington was working on a strong response to China, adding it would be announced before the end of the week.
Elsewhere, palladium eased 0.1% to $1,954.75 per ounce, silver fell 0.3% to $17.05 and platinum was steady at $839.74.
(Reporting by Brijesh Patel in Bengaluru; editing by Pritha Sarkar and Barbara Lewis)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.