Gold steadies near nine-year peak on Sino-US row, stimulus bets

Spot gold was up 0.1 per cent at $1,874.21 per ounce. - Reuters
Spot gold was up 0.1 per cent at $1,874.21 per ounce. - Reuters

Bengaluru - Silver retreats from near seven-year peak, down over 1%.



By Brijesh Patel

Published: Thu 23 Jul 2020, 11:36 AM

Last updated: Thu 23 Jul 2020, 1:54 PM

Gold steadied near a nine-year peak on Thursday as an escalation in US-China tensions bolstered its safe-haven appeal, with investors also looking for a hedge against possible inflation as more stimulus is rolled out to support pandemic-hit economies.
Spot gold was up 0.1 per cent at $1,874.21 per ounce by 0646GMT, after declining earlier in the session on mild profit-booking after prices hit their highest since September 2011 at $1,876.16. US gold futures rose 0.6 per cent to $1,875.50.
Gold prices in Dubai for 24K touched Dh226.50 per gram; 22K at 212.75 per gram; 21K at 203.00 per gram and 18K at 174.00 per gram.
"With tension between the United States and China rising, US bond yields continuing to edge lower, and a weaker dollar very much in evidence, the case for higher gold prices remains strong," said Jeffrey Halley, a senior market analyst at OANDA.
Hopes for another round of US stimulus measures also helped gold, considered a hedge against inflation and fears of currency debasement. Hitting risk sentiment, the United States gave China until Friday to close its consulate in Houston amid accusations of spying.
The resultant boost to demand for safety may help both gold and the dollar, said DailyFx strategist Margaret Yang, adding technical corrections were unlikely to change the metal's uptrend "in the mid- to long-term."
The Sino-US spat also lifted rival safe haven dollar off milestone lows, capping gold's upside. Coronavirus cases continued to surge in the United States, while more than 15.01 million people have been infected globally.
Elsewhere, silver retreated 1.1per cent to $22.79 per ounce, after having rallied to a near seven-year high, helped by hopes for a revival in industrial activity.
Platinum eased 0.1 per cent to $920.40, while palladium rose 0.2 per cent to $2,150.68. 
"We see demand contracting for both palladium and platinum, flipping the platinum market balance to positive, while narrowing the palladium deficit," ANZ analysts said in a note, adding weaker auto sales would be a drag this year. - Reuters, business@khaleejtimes.com


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