(Reuters) - Gold prices were on track for a second straight weekly gain on Friday, as uncertainties about the fate of a “phase one” trade deal between the United States and China lingered.
Spot gold inched 0.4% higher to $1,470.46 per ounce as of 1052 GMT. The metal has gained about 0.3% in the week, after a 0.6% rise last week.
U.S. gold futures climbed 0.5% to $1,470.70 per ounce.
“Gold is on the bullish side given the ongoing uncertainty regarding trade talks which increased following the approval of the Hong Kong bill in the U.S. congress,” Commerzbank analyst Carsten Fritsch said.
“In all likelihood, Trump will sign it (the bill) which could be a stumbling block for a solution in trade talks, and hurt prospects of continued negative interest rates. This has continued to support investment demand in gold.”
The United States on Wednesday passed two bills intended to support protesters in Hong Kong and send a warning to China about human rights, to China’s displeasure.
Chinese President Xi Jinping said earlier in the day that China wants to work out an initial trade pact with the United States and has been trying to avoid a trade war, but is not afraid to retaliate when necessary.
Investors were hedging their bets.
“This morning, despite stock markets in green, bullion is rebounding with the price now testing the resistance area of $1,470. It seems that investors are waiting for a clear signal on direction and particularly any news coming from the trade war,” Carlo Alberto De Casa, chief analyst at ActivTrades, said in a note.
The trade war between the world’s two largest economies has roiled markets since its inception more than 16-months ago, and stoked concerns of a global economic recession.
Tepid economic data from around the world have done little to assure investors. Euro zone business growth almost ground to a halt this month as activity in the bloc’s dominant services industry increased at a much weaker pace than expected, a survey showed on Friday.
Meanwhile, the German economy has avoided a recession as exports, state spending and consumers provided support.
Amongst other precious metals, silver rose 0.6% to $17.21 per ounce. Platinum dipped 0.3% to $912.41, but has so far gained about 2.7% this week.
Palladium was up 0.5% at $1,768.91 per ounce, on track for its best week since mid-September.
Reporting by Karthika Suresh Namboothiri in Bengaluru; editing by Philippa Fletcher