BENGALURU: Gold slid on Tuesday as the dollar benefited from concerns about an escalating trade dispute between the United States and China, leaving the metal near key technical levels that might prompt fresh speculative bets for prices to fall further.
Spot gold was down 0.6 percent to $1,222.05 an ounce at 1017 GMT, having earlier touched it lowest in a week. U.S. gold futures were 0.3-percent lower at $1,223.70 an ounce.
The dollar rose towards 2-1/2 month highs versus a basket of other major currencies after Bloomberg reported Washington was preparing to announce tariffs on all remaining Chinese imports by early December if talks next month between U.S. President Donald Trump and Chinese President Xi Jinping fail to ease the trade war.
“The dollar’s appreciation is not helping gold and the general movement down appears to be related to increased speculation about further moves by the Trump administration in relation to tariffs,” said Capital Economics analyst Ross Strachan.
Gold prices have slipped around 10 percent from their April peak after investors turned to the dollar as a safe-haven, as the U.S.-China trade war unfolded against a background of higher U.S. interest rates.
On the technical front, gold was testing support at the 100-day moving average around $1,220.
“If we drop back below the 100-day moving average, speculators could be inclined to add short positions again after they slashed them massively in the last 2-3 trading weeks. There could be risk that we could drop towards $1,200 again,” said Commerzbank analyst Carsten Fritsch.
Also hurting bullion was a modest recovery in global stock markets, analysts said.
“We will see gold trend around this ($1,220-$1,230) range for some time, unless some major breakthrough takes place politically or in the financial/economic space,” said John Sharma, an economist with National Australia Bank (NAB).
Gold prices have gained about 3 percent this month and are on track to break a six-month losing streak, the longest since a downturn that ran from the start of August 1996 to the end of January 1997.
Investors’ inclination towards gold can be seen in the holdings of the largest gold-backed exchange-traded-fund (ETF), New York’s SPDR Gold Trust, which rose to their highest in nearly two months, at 24.27 million ounces, on Monday.
In other precious metals, silver was down 0.2 percent at $14.42 per ounce, after hitting a near three-week low of $14.37 earlier.
Platinum was steady at $832 per ounce and palladium was down 0.1 percent at $1,087.90 per ounce.
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Source: Brecorder
