Gold extends rally

GOLD prices inched higher yesterday, extending their recovery from a 17-month low, amid lingering worries over the US-China trade conflict, while a stronger US dollar capped the safe haven’s gains.

Spot gold was up 0,2 percent at $1,215.71 an ounce at0410 GMT, building on its 0,5 percent gain on Friday. US gold futures GCcv1 were little changed at $1,223.7 an ounce.

“Gold is still very much being influenced by how the dollar is moving. The uptick in gold prices is from the market pricing in how the US-China trade war issues actually play out,” OCBC analyst Barnabas Gan said.

Gold prices rebounded on Friday from a 17-month low of$1,204 per ounce as dollar slipped after data showed US job growth slowed in July. The dollar also weakened against the yuan on Friday after the Chinese central bank sought to stabilise its currency.

The green-back, however, regained footing yesterday and strengthened against major peers. China proposed retaliatory tariffs on $60 billion worth of US goods on Friday, further escalating a bitter trade conflict, after the Trump administration sought to ratchet up pressure for trade concessions by proposing a higher 25-percent tariff on $200 billion worth of Chinese imports. While the intensifying trade spat has been one of the reason gold prices have been supported above the $1 200 handle, the trade issues have also been playing off into a more expensive dollar rather than higher gold prices, Gan said. Reuters.