August 07, 2018
PRECIOUS-Gold gains slightly as lower price levels induce buying
(Reuters) - Gold prices rose on Tuesday, propped up by buying after a recent price slump, but a strong dollar and expectations of further interest rate hikes in the United States limited interest in the precious metal.
Spot gold was up 0.3 percent at $1,209.20 an ounce at 0332 GMT.
U.S. gold futures were flat at $1,217.6 an ounce.
"There's some very light demand from China and Southeast Asia. We're just seeing some buying ahead of the first technical support around $1,205," a Sydney-based trader said.
Gold prices have declined nearly 12 percent since mid-April, pressured by a stronger U.S. dollar from an ongoing U.S.-China trade dispute and amid expectations of higher interest rates in the United States.
The U.S. Federal Reserve is widely expected to raise benchmark lending rates, for the third time this year, at its next policy meet in September. Higher U.S. rates tend to boost the dollar, making greenback-denominated gold more expensive for holders of other currencies.
Meanwhile, holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.78 percent to 788.71 tonnes on Monday.
"The overall sentiment remains weak in light of ETF reducing positions, strong dollar and rate hikes," said Helen Lau, analyst at Argonaut Securities.
The dollar was almost steady against major peers in early trade on Tuesday, supported by tensions around the U.S.-China trade dispute and as the pound remained weak on worries over a 'hard' Brexit from the European Union.
The greenback, however, edged down 0.1 percent versus the yen.
Global markets on Tuesday remained focused on developments on the trade war front while oil investors braced for impact from the first set of U.S. sanctions on Iran, set to take effect at 0401 GMT.
The Trump administration will aggressively enforce economic sanctions that it is re-imposing on Iran this week and expects the measures to have a significant impact on the Iranian economy, senior U.S. administration officials said on Monday.
Those sanctions include precious metals, U.S. bank notes, steel and coal.
Spot gold is poised to break a support at $1,206 per ounce, and fall towards the next support at $1,194, according to Reuters technicals analyst Wang Tao.
In other precious metals, silver rose 0.4 percent to $15.32 an ounce.
Palladium inched up 0.1 percent at $904.55 an ounce, while platinum fell 0.2 percent to $819.70 per ounce.