Gold eases on firmer equities, U.S.-China row limits fall

By Eileen Soreng (Reuters) - Gold prices on Wednesday retreated from a one-week high hit earlier in the session as other assets rose, but was kept above the key $1,800 level by simmering U.S.-China tensions and mounting coronavirus cases. Spot gold dipped 0.1% to $1,805.97 per ounce by 1215 GMT, having hit its highest since July 9 at $1,814.40

Reuters July 16, 2020 00:13:16 IST
Gold eases on firmer equities, U.S.-China row limits fall

Gold eases on firmer equities USChina row limits fall

By Eileen Soreng

(Reuters) - Gold prices on Wednesday retreated from a one-week high hit earlier in the session as other assets rose, but was kept above the key $1,800 level by simmering U.S.-China tensions and mounting coronavirus cases.

Spot gold dipped 0.1% to $1,805.97 per ounce by 1215 GMT, having hit its highest since July 9 at $1,814.40. U.S. gold futures were down 0.3% at $1,807.70.

"Hopes of a vaccine are giving all markets a lift and gold is suffering a little bit on the back of that," said Michael Hewson, chief market analyst at CMC Markets UK.

But gold will be bought on dips with rising infection rates, fears of a second wave of coronavirus and U.S.-China tensions driving prices higher, Hewson added.

World shares climbed towards a four-month high driven by optimism surrounding an experimental vaccine for COVID-19 produced by U.S. company Moderna.

Friction between the United States and China limited gold's decline.

U.S. President Donald Trump signed an executive order ending preferential treatment for Hong Kong and China responded by saying it would impose retaliatory sanctions on the United States.

Trump also shut the door on "Phase 2" trade negotiations with Beijing.

Also supporting gold prices, the dollar fell 0.4% versus a basket of currencies.

"As long as prices remain above the $1,800 level, gold has the potential to test $1,815 and a fresh multi-year high at $1,825, respectively," FXTM analyst Lukman Otunuga said in a note.

"Should $1,800 prove to be unreliable support, the precious metal may experience a technical correction back towards the $1,765-$1,780 region before bulls gather fresh momentum."

Reflecting appeal for gold, holdings of the SPDR Gold Trust exchange-traded fund were near their highest since April 2013.

Elsewhere, palladium was steady at $1,959.91 per ounce, platinum was 0.9% higher at $833.67 and silver gained 0.4% to $19.27.

(Reporting by Eileen Soreng in Bengaluru; Editing by Mark Potter and Elaine Hardcastle)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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