July 09, 2018
Gold prices rise as dollar hits 3 and half week low
(Reuters) - Gold prices rose on Monday as investors covered their short positions and the dollar slipped to its weakest since mid-June, while lingering U.S.-Sino trade tensions supported the bullion as well.
Spot gold was 0.4 percent higher at $1,258.61 an ounce, as of 0351 GMT, while U.S. gold futures for August delivery were up 0.3 percent at $1,259.90 an ounce.
Gold is pushing higher on the dollar's weakness in early Asian trading, MKS PAMP Group trader Tim Brown wrote in a note.
The dollar index, which measures the greenback against a basket of six major currencies, slipped to a 3-1/2-week low
after U.S. jobs data showed slower-than-expected wage growth.
The U.S. economy created more jobs than expected in June, but steady wage gains pointed to moderate inflation pressures
that should keep the Federal Reserve on a path of gradual interest rate increases this year.
A weak U.S. dollar makes greenback-denominated gold cheaper for holders of other currencies.
"Some short-covering has likely ensued given certainties over the U.S.-Sino trade tensions on Friday. Still, the uptick
in risk appetite into the week may be short-lived if more trade tariff threats are seen into the week ahead," said OCBC analyst
The United States and China exchanged the first salvos in what could become a protracted trade war on Friday, slapping
tariffs on $34 billion worth of each others' goods and giving no sign of willingness to start talks aimed at a reaching a truce.
President Donald Trump said on Thursday the United States may ultimately impose tariffs on more than a half-trillion
dollars' worth of Chinese goods.
"With the ongoing U.S.-Sino trade tensions, the resignation of David Davis will likely be a side-show, though it may raise
some concerns amongst market-watchers depending on how the overall Brexit issue progresses," OCBC's Gan added.
Brexit Secretary Davis resigned because he was not willing to be "a reluctant conscript" to Prime Minister Theresa May's
plans to leave the European Union, delivering a blow to a British leader struggling to end divisions among her ministers.
Spot gold may rise into a range of $1,268-$1,277 per ounce, as it has cleared a resistance at $1,257, Reuters technicals
analyst Wang Tao said.
Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.15 percent to 802.24
tonnes on Friday.
Among other precious metals, silver rose 0.7 percent at $16.11 an ounce.
Platinum gained 1.2 percent to $850.15 per ounce and
palladium was 0.4 percent higher at $957 an ounce.