(Reuters) - Gold prices were little changed on Wednesday, holding above the key $1,800 level, as rising tensions between United States and China firmed demand for the safe-haven metal, but a strong equities market capped its advance.
Spot gold was little changed at $1,808.39 per ounce by 11:33 am EDT (1533 GMT), having earlier hit its highest since July 9 at $1,814.40. U.S. gold futures fell 0.3% to $1,808.60 per ounce.
“We have even more (coronavirus case) numbers, we have a lot of U.S. political headlines... All these are somewhat supportive for gold, which is why we’ve been holding over the $1,800 area very well,” said George Gero, managing director at RBC Wealth Management.
President Donald Trump on Tuesday ordered an end to Hong Kong’s special status under U.S. law, prompting Beijing to warn of retaliatory sanctions.
Trump also shut the door on “Phase 2” trade negotiations with Beijing.
Meanwhile, U.S. stocks gained on the back of Goldman Sachs’ strong quarterly results, and promising early data for a potential COVID-19 vaccine, keeping gold’s advance subdued.
Also keeping the floor under the bullion’s prices, the dollar fell 0.2% versus a basket of currencies.
“Most gold followers are interested in interest rates remaining down... The pullback because of the benign interest rates in the U.S. dollar is very supportive of gold,” Gero added.
Gold has risen over 19% so far this year, mainly benefiting from lower interest rates and widespread stimulus measures from major central banks as it is widely viewed as a hedge against inflation and currency debasement.
“As long as prices remain above the $1,800 level, gold has the potential to test $1,815 and a fresh multi-year high at $1,825, respectively,” FXTM analyst Lukman Otunuga said in a note.
“Should $1,800 prove to be unreliable support, the precious metal may experience a technical correction back towards the $1,765-$1,780 region before bulls gather fresh momentum.”
Reflecting appeal for gold, holdings of the SPDR Gold Trust exchange-traded fund were near their highest since April 2013.
Elsewhere, palladium rose 0.4% to $1,966.05 an ounce, platinum was 0.1% lower at $825.64 and silver gained 0.4% to $19.27.
Reporting by Eileen Soreng and Diptendu Lahiri in Bengaluru; Editing by Bernadette Baum
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