Gold prices slipped yesterday as US threats of tariffs on an additional $200 billion of Chinese goods pushed safe-haven flows to the dollar and dashed hopes that Washington will eventually step back from the escalating row.
Spot gold was 0,31 percent lower at $1,251.31 an ounce. In the previous session, bullion hit a one-week low at $1,246.81. US gold futures for August delivery were 0,25 percent lower at $1,252.20.
US President Donald Trump detailed overnight a list of Chinese products that could face 10 percent tariffs. The clock now starts ticking on a two-month period of public comment before the levies are imposed.
The news sent the US dollar to an 11-month high versus the yuan and hit the Australian dollar, but left the euro largely unmoved. A strong greenback makes US dollar-priced gold costlier for non-American investors.
“Gold options keep getting higher and higher, which means people are positioned for prices to rise. It tells us there is overhanging positive sentiment to gold but right now the money is sitting on the sidelines,” ING analyst Oliver Nugent said.
The news of more possible US tariffs on China comes days after Washington imposed 25 percent duties on $34 billion of Chinese imports, and Beijing responded immediately with matching levies on the same amount of US exports to China. Spot gold may break support at $1,247 and fall more towards the next support at $1,237 as it has completed a bounce from the July 3 low of $1,237.32, Reuters technicals analyst Wang Tao said.
“When trade-war risk escalates, investors run for cover . . . I always have gold as a hedge but it’s been more challenging to have this view when the U.S. dollar is attracting haven flows,” said Stephen Innes, APAC trading head at OANDA. — Reuters.