Gold steadied after falling to its lowest in more than six months yesterday as mounting pressure from a U.S.-driven trade dispute propelled the dollar to near a one-year high and led investors to dump equities.
Global equities slipped to their lowest in almost three months, buffeted again after U.S. President Donald Trump outlined plans to clamp down on Chinese acquisitions of sensitive American technologies.
The trade tensions pushed the dollar to test a one-year high against a currency basket, before fizzling out as rising inflation in some German regions prompted traders to buy the euro.
A strong dollar makes dollar-priced gold costlier for non U.S. investors and while falling equities, seen as risky assets, usually help safe-haven gold, they have failed to do so this time.
“There is some safe-haven demand going into gold but not as much as is going elsewhere, like the dollar or treasuries or safe-haven currencies like the franc,” said Capital Economics analyst Simona Gambarini.
Spot gold edged up 0.1 percent to $1,253.10 an ounce at 1358 GMT. Earlier, it touched $1,248.21, its lowest since mid-December.
U.S. gold futures for August delivery dropped 0.2 percent to $1,254.20 an ounce. — Reuters.