LONDON: Gold prices rose on Wednesday from an 11-day low in the previous session as a U.S. dollar rally appeared to lose steam.
Gold has fallen 1.7 percent from an Aug. 28 high as currency weakness in emerging markets and concerns over global trade disputes strengthened the dollar, making bullion more expensive for buyers with other currencies.
But with the metal still close to a 1 1/2-year low of $1,159.96 an ounce touched last month, there is little room for prices to fall, Julius Baer analyst Carsten Menke said.
“Gold is showing signs of bottoming,” he said.
With the dollar flat against a basket of major currencies , Spot gold was up 0.2 percent at $1,193.73 at 1204 GMT after falling to $1,189.20, the lowest since Aug 24, on Tuesday.
U.S. gold futures were flat at $1,199.20 an ounce.
Gold has tumbled more than 12 percent from a peak in April as the dollar rose to 14-month highs and investors turned against the metal.
Helping drive prices down, holdings of gold by exchange traded funds have fallen by 8 percent, or 4.6 million ounces, since late May, while bets by hedge funds and money managers on lower prices on the Comex exchange exceeded bets on higher prices by the most on record last month.
Such negative positioning means speculators will struggle to push prices much lower, Menke said, though he added that until the dollar weakened, gold would also find it difficult to rise.
And the dollar shows little sign of weakening, with support on Wednesday from a looming deadline in the U.S.-China trade dispute and a refusal by Canada to back down on key demands in its trade talks with Washington.
Technical and momentum indicators were positive for gold, but the technical picture would remain mixed unless it could close above $1,200.70, analysts at ScotiaMocatta said.
Fibonacci resistance was at $1,213.20 with support at $1,185.30, they said.
In other precious metals, spot silver was up 0.4 percent at $14.13 after falling to its lowest since January 2016 at $13.97 in the previous session.
Platinum dropped 0.9 percent to $768.99 having hit$761.80, the lowest since Aug. 16, on Tuesday.
Palladium was up 0.3 percent at $982.47 after touching the highest in 11 weeks at $988.47 on Tuesday.
Source: Brecorder
