Gold & Silver

Gold drifts lower after Trump's tariff threat sparks rally

Reuters Bengaluru | Updated on August 02, 2019 Published on August 02, 2019

Spot gold likely to retest resistance at $1,449/oz

Gold prices fell nearly 1% on Friday, as investors locked in profit after U.S. President Donald Trump's fresh salvo in the year-long trade spat with China increased demand for the safe-haven metal in the previous session.

Spot gold was down 0.8% at $1,433.63 per ounce as of 0548 GMT, after hitting a two-week high of $1,446.10 earlier in the session.

The metal has risen about 1% so far this week and is headed for a third weekly gain in four.

U.S. gold futures rose 1% to $1,446.10 an ounce.

“Escalation in trade war between the U.S. and China has caused a spike in gold futures. We believe that prices might even go higher from current levels,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.

“We have strong resistance around $1,450, and people are taking some profits,” he added.

The metal jumped more than 2% on Thursday after Trump said he would impose an additional 10% tariff on $300 billion worth of Chinese imports from next month, intensifying the bruising trade war between the world's two top economies that has roiled financial markets globally.

Meanwhile, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.53% to 827.82 tonnes on Thursday from on Wednesday.

Spot gold may retest a resistance at $1,449 per ounce, a break above which could lead to a gain into the range of $1,461-$1,474, said Reuters technical analyst Wang Tao.

Elsewhere, palladium climbed 1.2% to $1,441.36 per ounce after falling to a seven-week low in the previous session, and was on track for its worst week in three months.

Platinum was up 0.5% at $853.01 an ounce, while silver fell 0.8% to $16.19.

Both silver and platinum were headed for their first weekly decline in four.

Published on August 02, 2019
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