Gold firms slightly as dollar loses its safe-haven shine
By Zandi Shabalala LONDON (Reuters) - Gold prices inched higher on Tuesday as the dollar eased following news that China would retaliate against a new round of U.S. tariffs on its goods.
By Zandi Shabalala
LONDON (Reuters) - Gold prices inched higher on Tuesday as the dollar eased following news that China would retaliate against a new round of U.S. tariffs on its goods.
U.S. President Donald Trump said he was imposing 10 percent tariffs on about $200 billion worth of imports from China, and threatened duties on about $267 billion more if China retaliated against the U.S. action.
While the greenback has benefited from safe-haven flows as the China-U.S. trade conflict has escalated in recent months, investors are starting to worry about the broader impact of the tariffs on the U.S. economy.
A weaker dollar generally boosts the price of dollar-denominated gold, which has been losing out on safe-haven flows to the greenback.
Spot gold was 0.1 percent higher at $1,201.93 an ounce by 1255 GMT in choppy trade. U.S. gold futures were steady at $1,205.20 an ounce.
"Gold is reflecting the choppiness that we are seeing in the dollar," said FOREX.com analyst Fawad Razaqzada, adding that the lack of direction in the dollar was reflected in narrow gold trading ranges.
Gold prices were "hovering below massive resistance between $1,205-$1,215 range", Razaqzada said, pointing out that gold was still in a bearish trend.
Gold prices have declined more than 12 percent from April, hurt by the intensifying trade dispute between the United States and China and as rising U.S. interest rates diminished demand for non-interest-bearing bullion.
Investors are eyeing a meeting by the U.S. Federal Reserve next week at which interest rates are widely expected to be raised, said ActivTrades chief analyst Carlo Alberto De Casa.
"Any comments about the 2019 monetary policy could be a new significant driver for the precious metal," he said.
Equity and base metals shrugged off signs that the trade war was ratcheting higher. [MKTS/GLOB]
Investors trimmed their net short position in Comex gold and silver in the week to Sept. 11, U.S. data showed.
"One of the big problems that gold is facing is that it is trying to battle a mountain of pessimism," ETF Securities analyst Nitesh Shah said.
"The speculative positioning in gold is down to its lowest levels since 2001 ... gold is not behaving like the haven that it is supposed to be."
Spot silver rose 0.4 percent to $14.17 an ounce. Platinum rose 1.8 percent to $810.80, while palladium was up 1.2 percent to its highest since mid-June at $995.80 ounce.
(Additional reporting by Nallur Sethuraman in Bengaluru; Editing by Dale Hudson and Jan Harvey)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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