Gold hovers above $1,280 as dollar recoils on U.S. data blow

Friday,   24-May-2019   09:05 AM (IST)

Gold prices held steady on Friday after rising above $1,280 in the previous session as weaker U.S. data pushed back the dollar and reignited hopes of a rate cut by the Federal Reserve this year. Spot gold was broadly unchanged at $1,283.18 per ounce as of 0056 GMT, having risen more than 1% to $1,287.23 in the previous session. U.S. gold futures eased 0.2% to $1,282.40 an ounce. The metal is also on track for a weekly gain, and is up about 0.5% so far. The U.S. dollar retreated after hitting its highest level in two years as weaker domestic data and the potential economic fallout from the trade war with China increased expectations for an interest-rate cut this year. Sales of new U.S. single-family homes fell from near an 11-1/2-year high in April as prices rebounded and manufacturing activity hit its lowest level in almost a decade in May, suggesting a sharp slowdown in economic growth was underway. Asian shares hobbled near four-month lows on Friday on worries the U.S.-China trade spat was turning into a technology cold war between the world’s two largest economies, prompting investors to embrace safer assets. President Donald Trump said on Thursday U.S. complaints against Huawei Technologies Co Ltd might be resolved within the framework of a U.S.-China trade deal, while at the same time calling the Chinese telecommunications giant “very dangerous.” The U.S. administration is considering Huawei-like sanctions on Chinese video surveillance firm Hikvision over the country’s treatment of its Uighur Muslim minority, a person briefed on the matter said on Wednesday, the latest effort by the Trump administration to crack down on Chinese companies as trade friction between the world’s top two economies escalates. The U.S. military said it sent two Navy ships through the Taiwan Strait on Wednesday, its latest transit through the sensitive waterway, angering China at a time of tense relations between the world’s two biggest economies. Bullion is often seen as a safe-haven investment in times of political or economic uncertainty. Ongoing stoppages at Newmont Goldcorp Corp’s Penasquito gold mine in Mexico are costing “millions” every day to both public coffers and the company, a senior Mexican official said on Thursday, urging a solution that will restart operations.