Gold prices dipped on Wednesday, May 30, as a robust U.S. dollar weighed on the market, but concerns about political turmoil in Italy and Sino-U.S. trade conflict limited losses.
Spot gold was 0.2 percent lower at $1,296 per ounce. U.S. gold futures for June delivery were down 0.3percent at $1,295.40 per ounce.
“The stronger dollar is the most significant headwind,” said Stephen Innes, APAC trading head at OANDA. “With the yellow metal’s sensitivity to the U.S. dollar on full display, it is unlikely gold will move significantly higher until we reach the EU ‘Crisis Zone’ which we are nowhere near at this stage.”
The dollar index , which measures the greenback against a basket of six major currencies, hovered near its 6-1/2 month peak touched in the previous session.
Investors fear that repeat elections in Italy – which could come as soon as July – may become a de-facto referendum on Italian membership of the currency bloc and the country’s role in the European Union.
“People are really worried about what’s happening in Europe and the U.S.-China trade tensions … we also see U.S. bond yields drop,” said Richard Xu, a fund manager at HuaAn Gold, China’s biggest gold exchange-traded fund. U.S. benchmark 10-year Treasury yields on Tuesday registered their largest one-day drop since Brexit nearly two years ago.
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Holdings of SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, rose 0.35 percent to 851.45 tonnes on Tuesday.
In other precious metals, spot silver was down 0.6 percent at $16.28 an ounce. Platinum fell 0.4 percent to $900.45 an ounce, while palladium was 0.2-percent lower at $977.31.
