February 27, 2019 / 5:28 PM / 3 months ago

PRECIOUS-Gold slips to near two-week lows as dollar firms on trade angst

 (Adds quotes, updates prices)
    * U.S.-China talks still need heavy work to reach deal
-Lighthizer
    * Platinum rises to more than three-month peak
    * Palladium retreats from record highs hit on Tuesday
    * GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl

    By Arijit Bose and Eileen Soreng
    Feb 27 (Reuters) - Gold prices fell to their lowest in
nearly two weeks on Wednesday, pressured by a mild revival in
the dollar after comments from the U.S. Trade Representative
dampened expectations of a quick resolution to the U.S.-China
trade dispute.
    Spot gold        slipped 0.8 percent to $1,318.64 per ounce
at 2:13 p.m. EST (1912 GMT). The yellow metal fell to its lowest
since Feb. 15 at $1,316.43 earlier in the session. 
    U.S. gold futures        settled down 0.5 percent at
$1,321.2 per ounce.
    The dollar        gained 0.2 percent on safe-haven bids
after U.S. Trade Representative Robert Lighthizer said
Washington's issues with China are "too serious" to be resolved
by Chinese promises to purchase more U.S. goods.             
      
    A strong dollar, which had been the preferred safe-haven
currency during the U.S.-China trade dispute, makes gold
costlier for holders of other currencies.
    "The U.S. dollar moved to its daily high and that put some
pressure on the gold market ... We're also seeing some profit
taking (in the gold market) from recent gains," said Jim
Wyckoff, senior analyst at Kitco Metals.
    Gold hit a more than 10-month peak last week and has gained
about 15 percent since  mid-August 2018, when it touched a more
than one-and-half-year low.
    Providing a solid foundation for bullion was Federal Reserve
Chairman Jerome Powell's reiteration that the central bank would
remain "patient" while deciding the future of U.S. interest
rates.             
    "Fed stating they will be patient with future rate hikes
gives gold investors some confidence that there is still upside
potential in the price of the metal," said Walter Pehowich,
executive vice president of investment services at Dillon Gage
Metals.
    Investors are also monitoring the tensions between India and
Pakistan, with the two countries engaged in retaliatory attacks.
            
    "The escalation in Indo-Pak tensions, along with Michael
Cohen's testimony today could potentially provide increased
equity volatility and provide a haven bid in gold, although this
would likely be short-lived," analysts at TD Commodities said in
a note.             
    Separately, spot palladium        dropped 2.5 percent to
$1,521.50 per ounce after setting a record high of $1,565.09 in
the previous session.
    The autocatalyst metal has climbed over 20 percent so far
this year on a widening supply tightness, while threats of
strikes by mineworkers in South Africa added further support.
             
    "There's lot of momentum in the palladium market. We're
seeing some retracement because the rally in prices has been
overdone," said Chris Gaffney, president of world markets at
TIAA Bank.
    Among other precious metals, silver        fell 1.5 percent
to $15.70 per ounce, while platinum        gained 0.9 percent to
$864, having earlier hit $871.94, its highest since Nov. 8.

    
 (Reporting by Arijit Bose and Eileen Soreng in Bengaluru,
editing by G Crosse and Steve Orlofsky)
  
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