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Gold recovers from 7 month low as dollar eases
BENGALURU: Gold prices recovered from a nearly seven-month low on Tuesday as dollar eased and Asian shares sank amid heightening trade friction between the United States and major economies.
Spot gold was up 0.3 per cent at $1,244.72 an ounce, as of 0843 GMT. Earlier in the session, bullion prices dropped to $1,237.32, their lowest since Dec. 12, 2017.
US gold futures rose 0.3 per cent to $1,245.80 an ounce.
“While the greenback is slightly weaker today, there is a suspicion that the technical breakdown below the $1,246 support level encouraged bears to drive prices lower,” said Lukman Otunuga, research analyst, FXTM.
The dollar index , which measures the greenback against a basket of six major currencies, was 0.4 per cent lower at 94.650, as of 0840 GMT.
A softer greenback generally decreases the cost of dollar-denominated bullion for investors paying in other currencies.
Meanwhile, Asian shares hit a nine-month low on Tuesday on rising fears over tense trade relations between the United States and major economies, as Chinese markets saw another rocky day. The United States is set to place tariffs on $34 billion worth of Chinese goods on July 6.
The US Chamber of Commerce on Monday denounced US President Donald Trump’s handling of global trade disputes, issuing a report that argued tariffs imposed by Washington and retaliation by its partners would boomerang badly on the American economy.
Gold prices can gain during times of uncertainty as it is seen as a safe place to park assets.
Key for the yellow metal would be support at $1,236, while resistance cuts in through $1,245 – $1,250, MKS PAMP Group trader Sam Laughlin said in a note.
In other precious metals, silver climbed 0.5 per cent to $15.91 an ounce, while palladium dropped 0.2 per cent to $942 per ounce.
Platinum slipped 0.2 per cent to $814.30 an ounce. Earlier in the session, it fell to the lowest since December 2008 at $793.
Autocatalyst metal platinum tumbled as the greenback strengthened, an intensifying US-European Union trade spat pressured precious metals, and political risk in Germany weighed.