March 7, 2018 / 11:35 AM / 3 months ago

PRECIOUS-Gold slips after hitting 1-week high on trade war fears

    * U.S. dollar, stocks down after Trump economic advisor
exits
    * Gold hits 1-wk high, climbing up from 2-mth lows last week
    * Spot gold        may fall to $1,327/oz - technicals
    * Palladium falls to lowest in nearly one month 

 (Recasts, updates prices, adds details/quote; changes dateline)
    By Maytaal Angel
    LONDON, March 7 (Reuters) - Gold prices slipped on Wednesday
on profit taking after hitting a one-week high earlier on news
that a top economic advisor to the Trump administration had
resigned, stoking fears of a trade war and knocking down the
dollar.
    Market watchers said the departure of economic adviser Gary
Cohn, a former Wall Street banker, would embolden protectionist
forces in the U.S. administration as U.S. President Donald Trump
tries to impose hefty tariffs on steel and aluminium. 
    The dollar hovered near a 14-month low against the yen,
while global equities fell. Equity futures pointed to the U.S.
S&P 500 index ESc1 opening percent lower, extending Tuesday's
falls, which followed the Cohn resignation.            
    Spot gold        was down 0.1 percent at $1,332.91 per ounce
at 1112 GMT, after touching $1,340.42, its highest since Feb.
26. U.S. gold futures         for April delivery fell 0.1
percent to $1,333.80 per ounce.
    "Yesterday's sharp gains in gold have come under a bit of
pressure amid profit-taking. The market remains in ranges (with)
 conflicting macro fundamentals in play," said Fawad Razaqzada
analyst at Forex.com.
    "On the one hand the prospect of a trade war should be
positive for gold, but bond yields are holding up, and North
Korea should be another negative for gold, hence why moves in
either direction don't last."
    Trump said on Tuesday he saw "possible progress" regarding
North Korea after South Korea said Pyongyang is willing to hold
talks with the United States on denuclearization and will
suspend nuclear tests while discussions are underway.
            
    Gold is used as an alternative investment during times of
political and financial uncertainty, and a weaker dollar makes
the metal cheaper for holders of other currencies. 
    Spot gold        may fall to $1,327 per ounce following its
failure to break above $1,342, according to Reuters technical
analyst Wang Tao.         
    Asian gold-backed exchange-traded funds (ETFs) added more
tonnes in February than North America or Europe, reversing
Asia's 2017 trend of having more flows out, the World Gold
Council said on Tuesday              
    In other precious metals, silver        fell 0.4 percent to
$16.67 per ounce, after hitting its highest in more than two
weeks on Tuesday. Platinum        dipped 0.9 percent to $960.60
per ounce.
    "Silver increased (on Tuesday) almost twice as sharply as
gold, pushing the gold/silver ratio slightly below 80 again. In
historical terms silver is still far too cheap, however – and in
our opinion unjustifiably so," said Commerzbank in a note. 
    Palladium        declined 1.1 percent to $972.80 per ounce.
It hit $971 an ounce, its lowest since Feb. 9, earlier in the
session. 

            


     
 
    

 (Additional reporting by Nithin Prasad in Bengaluru, editing by
Louise Heavens)
  
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