Gold steady amid Fed rate cut views, trade uncertainty

Thursday,   13-Jun-2019   09:17 AM (IST)

Gold held steady in early Asian trade on Thursday as festering Sino-U.S. trade tensions and hopes of an interest rate cut by the U.S. central bank following soft inflation data buoyed demand for the safe-haven bullion. Spot gold was up 0.1% at $1,334.11 as of 0148 GMT. U.S. gold futures were steady at $1,336.70 an ounce. U.S. consumer prices barely rose in May, data from the Labor Department showed on Wednesday, pointing to moderate inflation that together with a slowing economy increased pressure on the Federal Reserve to cut interest rates this year. Weak economic data such as Wednesday’s has investors hoping the Fed would give hints about a rate cut after its June 18-19 meeting. The dollar index versus a basket of six major currencies was steady, having risen more than 0.3% overnight. U.S. President Donald Trump declined to set a deadline on Wednesday for levying tariffs on another $325 billion of Chinese goods and called the relationship with Beijing good but “testy” after China walked back commitments for a trade deal. Trump said he had a “feeling” a U.S.-China trade deal could be reached. But he again threatened to increase tariffs on Chinese goods if there is no agreement. Trump says he wants to meet with Chinese President Xi Jinping at the June 28-29 G20 summit in Osaka, Japan and will decide on whether to extend tariffs to almost all Chinese imports after that. Asian stocks stuttered on Thursday, dogged by the uncertainty over an intractable U.S.-China trade dispute. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.5% to 759.70 tonnes on Wednesday from 756.18 tonnes on Tuesday.