Gold inches down on robust dollar; Italy crisis curbs losses
By Karen Rodrigues BENGALURU (Reuters) - Gold prices edged down on Wednesday as a robust U.S. dollar weighed on the market, but concerns about political turmoil in Italy and Sino-U.S
By Karen Rodrigues
BENGALURU (Reuters) - Gold prices edged down on Wednesday as a robust U.S. dollar weighed on the market, but concerns about political turmoil in Italy and Sino-U.S. trade conflict limited losses.
Spot gold was 0.2-percent lower at $1,296 per ounce by 0736 GMT.
U.S. gold futures for June delivery were down 0.3 percent at $1,295.40 per ounce.
"The stronger dollar is the most significant headwind," said Stephen Innes, APAC trading head at OANDA.
"With the yellow metal's sensitivity to the U.S. dollar on full display, it is unlikely gold will move significantly higher until we reach the EU 'Crisis Zone' which we are nowhere near at this stage."
The dollar index, which measures the greenback against a basket of six major currencies, hovered near its 6-1/2 month peak touched in the previous session.
Investors fear that repeat elections in Italy - which could come as soon as July - may become a de-facto referendum on Italian membership of the currency bloc and the country's role in the European Union.
"People are really worried about what's happening in Europe and the U.S.-China trade tensions ... we also see U.S. bond yields drop," said Richard Xu, a fund manager at HuaAn Gold, China's biggest gold exchange-traded fund.
U.S. benchmark 10-year Treasury yields on Tuesday registered their largest one-day drop since Brexit nearly two years ago.
Meanwhile, China on Wednesday lashed out at Washington's unexpected statement that it still holds the threat of imposing tariffs on $50 bln of Chinese goods, saying Beijing was ready to fight back if Washington was looking to ignite a trade war.
"That (U.S.-China conflict) is driving down risk appetite, hence the stock markets are tanking," Xu said.
Asian stocks extended a global sell-off on Wednesday as Italy's political crisis rippled across financial markets.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.35 percent to 851.45 tonnes on Tuesday.
In other precious metals, spot silver was down 0.6 percent at $16.28 an ounce.
Platinum fell 0.4 percent to $900.45 an ounce, while palladium was 0.2-percent lower at $977.31.
(Reporting by Karen Rodrigues in Bengaluru; Editing by Joseph Radford and Sunil Nair)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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