Home / Business / Gold prices fall

Gold prices fall

Gold prices fell as much as 2 percent yesterday as the dollar rallied after the United States and China agreed to restart trade talks, boosting investor appetite for riskier assets and taking the fizz out of the precious metal’s recent rally.

Spot gold was down 1,3 percent at $1,391 per ounce as of 1142 GMT, after falling to its lowest since June 20 at $1,381.51.

US gold futures dropped 1,3 percent to $1,394.60.

“The news that the US and China agreed to restart trade talks helped some of the risk sentiment in the market. The dollar and bond yields are higher this morning. That’s forced some long liquidation and profit-taking in the market,” said Saxo Bank analyst Ole Hansen.

The United States and China agreed on Saturday to resume trade negotiations after President Donald Trump offered concessions to his Chinese counterpart Xi Jinping when the two met at the sidelines of the G20 summit in Japan. The dollar index jumped to a more than one-week high, making non-interest bearing gold more expensive for holders of other currencies.

Hansen, however, was cautious.

“We are still bullish on gold. The amount of negative yield around (the) globe is still very high. There is no major shift in the future direction of US Federal Reserve rate cuts and there are concerns about global growth,” he said, adding the real breakthrough in trade talks was yet to come.

No deadline was set for a trade deal and much damage has already been done, with two surveys of Chinese manufacturing showing activity contracting.

Gold prices hit a six-year high last week at $1,438.63 an ounce, driven by a dovish outlook from major central banks and an escalation of tensions between the United States and Iran. While gold has shed about $50 dollars since then, some analysts see it as a healthy correction and an opportunity to buy.

“We do not expect gold to fall significantly further. In our view, it is above all the upcoming European Central Bank and Fed rate cuts, and the political risks, that argue against any pronounced and lasting price slide,” Commerzbank analysts said in a note. — Reuters.

Source :

the herald

Check Also

Wheels for Workers – 25 New Buses for Civil Servants Launched

By Farirai Machivenyika President Mnangagwa yesterday launched 25 new buses for civil servants as part …

error: Content is protected !!