Gold inches up on softer dollar, US-China trade tensions
Gold prices edged higher on Wednesday as a weaker dollar and simmering trade tension between the United States and China lifted demand for the safe-haven metal.
Spot gold was up 0.1% at $3,355.46 an ounce, as of 0836 GMT. U.S. gold futures edged 0.1% higher to $3,379.80.
The dollar index which measures the currency against six major peers, fell 0.1%, making gold more attractive for other currency holders.
"I think we are seeing the same concerns around trade talks, not much progress and that is adding to uncertainty over where tariffs will land, and that's driving gold prices right now," said Nitesh Shah, commodities strategist at WisdomTree.
Donald Trump said on Wednesday that Chinese President Xi Jinping is tough and "extremely hard to make a deal with," days after the U.S. President accused China of violating an agreement to roll back tariffs and trade restrictions.
The U.S. tariff rate on most imported steel and aluminum doubled on Wednesday as Trump ratchets up a global trade war on the same day he expects trading partners to deliver their "best offer" in bids to avoid punishing import tax rates on other goods from taking effect in early July.
The focus will be on Friday's U.S. non-farm payrolls data for more cues on the Federal Reserve's policy path. Fed officials have reiterated their cautious policy stance, citing risks from trade tensions and economic uncertainty.
"If the data is stronger than expected, interest rate cut expectations are likely to wane, which would weigh on the gold price," said Commerzbank analyst Carsten Fritsch.
"We see gold trading in a range between $3,300 and $3,400 per troy ounce in the short term."
Gold, a safe-haven asset during times of political and economic uncertainty, tends to thrive in a low-interest-rate environment.
Elsewhere, spot silver fell 0.2% to $34.44 an ounce, platinum rose 0.9% to $1,083.22 and palladium lost 0.4% to $1,006.49.
Source: Reuters
