Gold prices off one-week high as U.S.-China trade tensions lift dollar
By Eileen Soreng (Reuters) - Gold on Tuesday slipped from the previous session's one-week peak, pulled down by a firm dollar as the currency was the preferred safe-haven amid uncertainty over U.S.-China trade tensions. Spot gold fell 0.5% to $1,278.77 per ounce by 11:37 am ET (1537 GMT), having touched its highest since May 17 at $1,287.32 in the previous session.
By Eileen Soreng
(Reuters) - Gold on Tuesday slipped from the previous session's one-week peak, pulled down by a firm dollar as the currency was the preferred safe-haven amid uncertainty over U.S.-China trade tensions.
Spot gold fell 0.5% to $1,278.77 per ounce by 11:37 am ET (1537 GMT), having touched its highest since May 17 at $1,287.32 in the previous session.
U.S. gold futures were 0.4% lower at $1,278.1 an ounce.
"The most important force in the market at the moment is the U.S.-China trade tensions and once again we see the dollar benefiting from safe haven flows rather than gold," said Suki Cooper, precious metals analyst at Standard Chartered Bank.
"It's going to be a very difficult hurdle for gold to reach the 1,300 level and that might not happen until we see more seasonal demand coming into play or if the dollar strength starts to ease, which we don't think will happen till later in the year."
The dollar rose 0.3% against a basket of other leading currencies, supported by trade and political worries and a strong rise in U.S. consumer confidence.
U.S. President Donald Trump said on Monday at a news conference with Japanese President Shinzo Abe that he was "not ready to make a deal with China," denting hopes of a trade agreement between the world's biggest economies.
The dollar has also benefited from a slide in the euro, driven lower by political risks in Europe following last week's European Union parliamentary elections, which showed a polarization of the 28-member bloc.
Further weighing on the bullion prices was a firm U.S. equities market propped up by the technology sector.
Signals are mixed for spot gold as it failed twice to break resistance at $1,286 per ounce, according to Reuters technical analyst Wang Tao.
"Following weeks of difficult market conditions where highs have been bought and lows sold, the conviction rate among traders have deteriorated," said Saxo Bank commodity strategist Ole Hansen.
The longs that were bought during the past couple of days are now being sold back following the break below $1,292.6 and $1,286, Hansen added.
Hedge funds and money managers sharply reduced their net long positions in COMEX gold in the week to May 21, the U.S. Commodity Futures Trading Commission said on Friday.
Among other precious metals, silver was down 1.8% at $14.33 per ounce.
"In the current climate where there are concerns around silver industrial demand and trade tensions potentially impacting demand from China, silver outlook looks vulnerable in the near term," Cooper said.
Palladium climbed 0.4% to $1,341.56 per ounce, after hitting its highest since May 15 at $1,349. Platinum fell 1.3% to $795.96.
(Reporting by Eileen Soreng and Brijesh Patel in Bengaluru; Editing by Steve Orlofsky)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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