May 21, 2019 / 1:24 AM / 2 months ago

PRECIOUS-Gold eases as dollar steals safe-haven thunder

May 20 (Reuters) - Gold eased on Tuesday after touching a more than two-week low in the previous session, as a strong dollar diminished bullion’s safe-haven appeal amid heightening Sino-U.S. trade tensions.


* Spot gold edged 0.1% lower to $1,276.02 per ounce at 0106 GMT.

* U.S. gold futures also eased 0.1% to $1,276.10 an ounce.

* The dollar held near a 2-1/2-week high on Tuesday, supported by higher U.S.-yields and as intensifying trade frictions between the United States and China boosted appetite for the safe-haven greenback.

* Worries that the United States and China were digging in for a longer, costlier trade war weighed on financial markets on Monday as Beijing accused Washington of harbouring “extravagant expectations” for a deal to end their dispute.

* Asian shares wobbled near four-month lows on Tuesday on mounting worries the White House’s black-listing of Chinese telecom giant Huawei could further inflame already tense relations between the United States and China.

* Since the White House added Huawei Technologies to a trade blacklist last week, several companies, including Alphabet Inc’s and mobile phone parts producer Lumentum Holdings Inc, have moved to suspend business with the Chinese tech giant.

* Also aggravating global tensions U.S. President Donald Trump warned on Monday Iran would be met with “great force” if it attacked U.S. interests in the Middle East, and government sources said Washington strongly suspects Shi’ite militias with ties to Tehran were behind a rocket attack in Baghdad’s Green Zone.

* Gold, which is generally considered a safe-haven asset, has shrugged most news of escalating political tensions, much to the bulls’ dismay.

* Analysts now believe that it has started to lose its safe-haven appeal while the dollar has started to mimic its characteristics from last year when it was preferred over gold by investors looking to hedge against a simmering trade war.

* Elsewhere, Russia raised gold holdings by 15.15 tonnes to 2,183.52 tonnes in April, data from the International Monetary Fund (IMF) showed on Monday.

* Russia’s gold reserves stood at 70.2 million troy ounces as of the start of May, the country’s central bank said on Monday.


* 1400 U.S. Existing Home Sales April

* 1400 EU Consumer Confid. Flash May (Reporting by Arijit Bose in Bengaluru; Editing by Rashmi Aich)

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