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Gold holds steady on global growth concerns; trade talks in focus

Monday,   11-Feb-2019   09:32 AM (IST)

Gold prices held firm on Monday, supported by worries over a slowdown in global economic growth and uncertainties around Sino-U.S. trade war, but a strong dollar limited the safe-haven metal’s appeal. Spot gold was marginally lower at $1,312.76 per ounce, as of 0254 GMT, while U.S. gold futures fell 0.2 percent to $1,316.50 per ounce. Investors are looking ahead to trade talks between Beijing and Washington this week with a delegation of U.S. officials travelling to China for the next round of negotiations. U.S. President Donald Trump said last week that he had no plans to meet with Chinese President Xi Jinping before a March 1 deadline to achieve a trade deal. Trump has vowed to increase U.S. tariffs on $200 billion worth of Chinese imports if the two sides cannot reach a deal by 12:01 a.m. (0501 GMT) on March 2. Trade tensions between the world’s top two economies have rattled financial markets since last year and also boosted the appeal of the U.S. dollar as a safe-haven. The dollar index was hovering near a more than one-month high touched in the previous session. A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies. Gold slumped to a more than 1-1/2-year low in mid-August to $1,159.96 on rising interest rates and a strong dollar. But, tumultuous stock markets and expectations of a pause in interest rate hikes this year helped gold touch a nine-month high at $1,326.30 in late January. Tighter financial conditions since last September make further interest rate hikes seem much less necessary than just a few months ago, San Francisco Federal Reserve Bank President Mary Daly said on Friday.