July 23, 2020 / 4:12 AM / 19 days ago

PRECIOUS-Gold steadies near nine-year peak on Sino-U.S. row, stimulus bets

    * Silver retreats from near seven-year peak, down over 1%
    * Platinum, palladium demand could contract amid weak sales-
ANZ
    * GRAPHIC-2020 asset returns: tmsnrt.rs/2jvdmXl

 (Recasts, adds comment, updates prices)
    By Brijesh Patel
    July 23 (Reuters) - Gold steadied near a nine-year peak on
Thursday as an escalation in U.S.-China tensions bolstered its
safe-haven appeal, with investors also looking for a hedge
against possible inflation as more stimulus is rolled out to
support pandemic-hit economies.
    Spot gold        was up 0.1% at $1,874.21 per ounce by 0646
GMT, after declining earlier in the session on mild
profit-booking after prices hit their highest since September
2011 at $1,876.16. U.S. gold futures        rose 0.6% to
$1,875.50.
    "With tension between the United States and China rising,
U.S. bond yields continuing to edge lower, and a weaker dollar
very much in evidence, the case for higher gold prices remains
strong," said Jeffrey Halley, a senior market analyst at OANDA.
    Hopes for another round of U.S. stimulus measures also
helped gold, considered a hedge against inflation and fears of
currency debasement.             
    Hitting risk sentiment, the United States gave China until
Friday to close its consulate in Houston amid accusations of
spying.                         
    The resultant boost to demand for safety may help both gold
and the dollar, said DailyFx strategist Margaret Yang, adding
technical corrections were unlikely to change the metal's
uptrend "in the mid- to long-term." 
    The Sino-U.S. spat also lifted rival safe haven dollar
       off milestone lows, capping gold's upside.       
    Coronavirus cases continued to surge in the United States,
while more than 15.01 million people have been infected
globally.             
    Elsewhere, silver        retreated 1.1% to $22.79 per ounce,
after having rallied to a near seven-year high, helped by hopes
for a revival in industrial activity.
    Platinum        eased 0.1% to $920.40, while palladium
       rose 0.2% to $2,150.68.
    "We see demand contracting for both palladium and platinum,
flipping the platinum market balance to positive, while
narrowing the palladium deficit," ANZ analysts said in a note,
adding weaker auto sales would be a drag this year.

 (Reporting by Brijesh Patel in Bengaluru;
Editing by Vinay Dwivedi and Subhranshu Sahu)
  
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