Gold prices inch up on trade war concerns

BENGALURU: Gold prices inched higher early Monday after falling to a 5-1/2-month low in the previous session, as a trade dispute between the two largest world economies triggered safe-haven buying.

FUNDAMENTALS

Spot gold had edged up 0.2 per cent to $ 1,281.41 per ounce by 0045 GMT. It touched its weakest since late-December at $ 1,275.01 an ounce on Friday.

U.S. gold futures for August delivery were up 0.4 per cent at $ 1,284.10 per ounce.

The dollar index , which measures the greenback against a basket of six major currencies, rose 0.1 per cent to 94.895.

U.S. President Donald Trump said he was pushing ahead with hefty tariffs on $ 50 billion of Chinese imports on Friday, and the smouldering trade war between the world’s two largest economies showed signs of igniting as Beijing immediately vowed to respond in kind.

China will impose additional 25 per cent tariffs on 659 US goods worth $ 50 billion in response to the US announcement that it will levy tariffs on Chinese imports, the Chinese commerce ministry said.

South Korea and the United States are expected to announce the suspension of “large-scale” military drills this week, with the provision that they would restart if North Korea failed to keep its promise to denuclearise, news agency Yonhap said on Sunday.

Syrian state media, citing a military source, reported on Monday that US-led coalition aircraft had bombed “one of our military positions” in eastern Syria, leading to deaths and injuries, but the US military denied carrying out strikes in the area.

Dallas Federal Reserve Bank President Robert Kaplan on Friday said he would be open to raising the Fed’s target policy rate a fourth time late this year, but his base case is for just three.

Speculators raised their net long positions in COMEX gold and silver contracts in the week to June 12, US Commodity Futures Trading Commission (CFTC) data showed on Friday.

Australia’s South32 Ltd has bid $ 1.3 billion to take full control of Arizona Mining , offering a hefty premium for the Toronto-listed firm which is developing zinc, lead, manganese and silver assets.