June 19, 2018

Gold prices gain as U.S.-China trade spat stokes safe-haven buying

(Reuters) - Gold prices rose on Tuesday, supported by safe-haven buying, as an escalating trade spat between the United States and China sparked a sell-off in equity markets.

    Spot gold was up 0.45 percent at $1,283.62 an ounce by 0336 GMT. 

    U.S. gold futures for August delivery were also 0.5-percent higher at $1,286.10 per ounce.

    The U.S. dollar and Asian stocks extended a global downturn after President Donald Trump threatened to impose a 10 percent tariff on $200 billion of Chinese goods in an escalating tit-for-tat trade war between the world's two biggest economies.

    The dollar was down 0.3 percent against a basket of major currencies at 94.548, as well as hitting a one-week low versus the yen. Asian shares outside Japan slid 1 percent to their lowest level in over four months.

    "There is a bit of panic as investors are looking for cover, especially from equity market, and as we know gold does offer that hedge," said Stephen Innes, APAC trading head at OANDA.

    Gold prices can gain during times of financial and political uncertainty as the metal is seen as a safe place to park assets, alongside the Japanese yen.

    Spot gold may bounce moderately to resistance at $1,290 and then retest support at $1,277 per ounce, said Reuters technicals analyst Wang Tao.

    Meanwhile, in other precious metals, silver climbed 0.5 percent to $16.48 an ounce, after hitting its lowest since June 5 at $16.39 in the previous session.

    Platinum rose 0.1 percent to $882.50 an ounce, having dropped to a four-week low on Monday.

    Palladium was down 0.2 percent at $987.81 an ounce, after marking its lowest since June 5 at $979.99 overnight.