Gold slips as strong dollar, bond rally offset boost from growth woes

By Sethuraman N R

(Reuters) – Gold costs fell to one-week low on Thursday as bonds rallied and the greenback hovered close to a two-year excessive, offsetting the assist for bullion from an more and more bitter Sino-U.S. commerce dispute that rekindled doubts about world financial development.

Spot gold was down zero.three% at $1,275.59 per ounce, as of 0715 GMT, after falling to its lowest since Might 23 at $1,274.95. U.S. gold futures edged zero.5% decrease to $1,274.70 an oz.

“Buyers seem like they like U.S. Treasuries as a secure haven for now, evident by the inverted U.S yield curve,” Howie Lee, an economist at OCBC Financial institution, stated.

“A robust greenback can also be possible impeding large gamers resembling China and India from consuming an excessive amount of (of gold).”

The greenback held regular in opposition to its key rivals on Thursday as escalating Sino-U.S. commerce tensions pressured buyers into the shelter of safe-haven belongings, together with authorities bonds. [USD/]

Towards a basket of six main currencies, the greenback was regular at 98.222, hovering inside the attain of a two-year excessive of 98.371 hit per week in the past. The index is up greater than 2% for the 12 months.

Asian shares tracked Wall Road losses on Thursday as newest exchanges between Beijing and Washington signalled the heightened threat of a protracted commerce conflict. [MKTS/GLOB]

Frightening commerce disputes is “bare financial terrorism”, a senior Chinese language diplomat stated on Thursday, ramping up the rhetoric in opposition to america amid a bitter commerce conflict that’s not displaying any indicators of ending quickly.

Bullion appears to have discovered a base round $1,270 regardless that it has failed to interrupt a lot greater, analysts stated.

“With bond yields so low and weakening fairness markets, gold might discover assist. So far as the value stays above $1,265-$1,270, gold will rally again to $1,306 and $1,316 ranges,” stated Nicholas Frappell, world common supervisor at ABC Bullion.

In the meantime, holdings of SPDR Gold Belief, the world’s largest gold-backed exchange-traded fund, rose zero.5% to 740.86 tonnes on Wednesday. [GOL/ETF]

Regardless of Wednesday’s rise, SPDR gold holdings are down over 6% to date this 12 months.

Gold ETF holdings have remained muted despite the escalation in Sino-U.S. tensions, suggesting that buyers are taking a look at various sources of portfolio hedge, OCBC’s Lee stated.

Amongst different valuable metals, silver fell zero.1% to $14.40 per ounce. The steel had dropped to $14.25 on Tuesday, its lowest since early December.

Platinum rose zero.three% to $793.55 per ounce, after earlier falling to its lowest since Feb. 15 at $785.50. Palladium dropped zero.four% to $1,344 per ounce.

(Reporting by Arijit Bose in Bengaluru; Modifying by Rashmi Aich and Sherry Jacob-Phillips)

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