Gold slips to near two-week lows as dollar strengthens on trade angst

GOLD prices fell to their lowest in nearly two weeks on Wednesday, pressured by a mild revival in the dollar after comments from the US trade representative dampened expectations of a quick resolution to the US-China trade dispute.

Spot gold slipped 0.8% to $1,318.64 per ounce at 2:13 p.m. EST (1912 GMT). The yellow metal fell to its lowest since Feb. 15 at $1,316.43 earlier in the session.

US gold futures settled down 0.5% at $1,321.2 per ounce.

The dollar gained 0.2% on safe-haven bids after US Trade Representative (USTR) Robert Lighthizer said Washington’s issues with China are “too serious” to be resolved by Chinese promises to purchase more US goods.

A strong dollar, which had been the preferred safe-haven currency during the US-China trade dispute, makes gold costlier for holders of other currencies.

“The US dollar moved to its daily high and that put some pressure on the gold market… We’re also seeing some profit taking (in the gold market) from recent gains,” said Jim Wyckoff, senior analyst at Kitco Metals.

Gold hit a more than 10-month peak last week and has gained about 15% since mid-August 2018, when it touched a more than oneand-half-year low.

Providing a solid foundation for bullion was Federal Reserve Chairman Jerome Powell’s reiteration that the central bank would remain “patient” while deciding the future of US interest rates.

“Fed stating they will be patient with future rate hikes gives gold investors some confidence that there is still upside potential in the price of the metal,” said Walter Pehowich, executive vicepresident of investment services at Dillon Gage Metals.

Investors are also monitoring the tensions between India and Pakistan, with the two countries engaged in retaliatory attacks.

“The escalation in Indo-Pak tensions, along with Michael Cohen’s testimony today could potentially provide increased equity volatility and provide a haven bid in gold, although this would likely be short-lived,” analysts at TD Commodities said in a note.

Separately, spot palladium dropped 2.5% to $1,521.50 per ounce after setting a record high of $1,565.09 in the previous session.

The autocatalyst metal has climbed over 20% so far this year on a widening supply tightness, while threats of strikes by mineworkers in South Africa added further support.

“There’s lot of momentum in the palladium market. We’re seeing some retracement because the rally in prices has been overdone,” said Chris Gaffney, president of world markets at TIAA Bank.

Among other precious metals, silver fell 1.5% to $15.70 per ounce, while platinum gained 0.9% to $864, having earlier hit $871.94, its highest since Nov. 8. —