Gold falls for a second day … RTRS
Gold falls for a second day as dollar strength outweighs safe-haven demand
[BENGALURU] Gold prices fell for a second day on Tuesday to the lowest since December as strength in the US dollar put pressure on the yellow metal, offsetting safe-haven
demand amid mounting global trade tensions.
Spot gold fell 0.2 per cent to US$1,239.63 an ounce as of 3.42am GMT after earlier dropping to its lowest since December 12 at US$1,237.36. In the previous session, it fell
about 1 per cent. US gold futures were 0.1 per cent lower at US$1,240.60 an ounce.
“It’s all about the USD demand rather than any news specific as the markets insatiable demand for USD to ride out yet another building perfect storm has the USD glittering. As such gold is especially vulnerable
in such an environment,” said Stephen Innes, APAC trading head at OANDA.
The dollar was a shade lower on Tuesday but remained broadly supported after strong US economic data. A stronger dollar increases 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 US$34 billion worth of Chinese goods on July 6. US President Donald Trump warned the World Trade Organization on Monday that “we’ll be doing something” if the United
States is not treated properly, just hours after the European Union said that US automotive tariffs would hurt its own vehicle industry and prompt retaliation.
The US Chamber of Commerce on Monday denounced President 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 is usually seen as a safe-haven asset in times of political and economic uncertainties but has lately failed to do so.
“Gold seems to be under pressure until we get to a level when everyone starts stepping in but that might be only between US$1,235-$1,215 era,” a Hong Kong-based trader said. Spot gold may break a support at US$1,237
per ounce and fall to the next support at US$1,229, Reuters technicals analyst Wang Tao said.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 1.19 per cent to 809.31 tonnes on Monday.
In other precious metals, silver was down 0.1 per cent at US$15.82 an ounce and palladium fell 0.4 per cent to US$940.10 per ounce. Platinum was 0.3 per cent lower at US$813.30 an ounce. In the prior session,
it fell to the lowest since December 2008 at US$804.
Autocatalyst metal platinum tumbled as the greenback strengthened, an intensifying US-European Union trade spat pressured precious metals, and political risk in Germany weighed.