Gold prices went downward on Tuesday, having surged in the previous session as falling U.S stock markets and fears of a global trade war pushed investors toward safer assets.
Spot gold was down 0.3 percent at $1,337.31 an ounce at 1058 GMT after rising 1.3 percent on Monday. U.S. gold
futures were 0.4 percent lower at $1,341.60 an ounce.
“It’s a correction after yesterday’s strong move,” said Commerzbank analyst Carsten Fritsch.
“There’s a lack of conviction that prices will rise much further or can sustain levels of $1,350. Profit taking started
here so we are back below $1,340.”
Gold has struggled to break from a trading range of $1,310 – $1,360 since the start of the year.
“It’s going to take a significant trigger to push it beyond this range,” said Danske Bank analyst Jens Pedersen.
European stock markets continued to fall on Tuesday, led by technology shares, but Wall Street futures suggested that U.S. markets would open higher.
The Trump administration is meanwhile expected this week to unveil a list of advanced technology Chinese imports targeted for U.S. tariffs after Beijing on Monday raised tariffs on 128 U.S. products, escalating a dispute between the world’s two largest economies.
Gold is often used as a safe place to park assets during times of financial or political uncertainty.
Funds have raised their bets on higher prices, with the net long position on the Comex exchange rebounding from a
three-month low.
Speculative investors have room to expand their long positions further, helping drive prices higher, analysts at Citi
said in a note.
Higher market volatility and rising tension between Washington and Beijing will likely hold gold above $1,300
throughout 2018, they said.
“We assign a 30 percent probability that gold prices can scale $1,400 an ounce this year.”
Momentum indicators suggested gold prices would rise, with technical Fibonacci support at $1,317.25 and resistance at $1,361.80, analysts at ScotiaMocatta said in a note.
In other precious metals, spot silver was down 0.4 percent at $16.55 an ounce after rising 1.8 percent in the
previous session.
Platinum was 0.2 percent higher at $930.90 an ounce.
Palladium was up 0.5 percent at $939.30 after touching $927.75, its lowest since Oct. 10.
Source: Reuters
