Gold prices moved higher on Wednesday, rising for a second successive session, as worries about an escalation in trade tensions prompted traders to seek the safe haven asset.
Traders rushed for gold also due to geopolitical worries amid news about protests in Hong Kong, opposing a proposed extradition bill that has sparked concerns over China’s control of the semi-autonomous industry, and the missile attack allegedly by Yemen’s Iran-allied rebels at a Saudi airport that wounded more than 25 persons.
The dollar’s rebound limited the yellow metal’s gains.
The dollar, which suffered losses against major currencies on Tuesday, came back fairly strongly today despite prospects of an interest rate cut sometime in the foreseeable future.
The dollar index rose to 96.98, gaining about 0.3%.
Gold futures for August ended up $5.60, or 0.4%, at $1,336.80 an ounce.
On Tuesday, gold futures for August settled with a gain of $1.90, or 0.1%, at $1,331.20 an ounce.
Silver futures for July ended up $0.013 at $14.753 an ounce, while Copper futures for July settled at $2.6540 per pound, down $0.0175 from previous close.
Worries over U.S.-China trade war have risen after U.S. President Donald Trump said that he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees to four or five “major points” which he did not specify.
Data showing a measure of China’s factory gate inflation slowed in May on weak commodity somewhat confirms the world’s second largest economy’s growth is slowing down.
China’s consumer price inflation accelerated on food prices in May, while factory gate inflation slowed on weak commodity demand, data from National Bureau of Statistics showed Wednesday.
Consumer prices advanced 2.7% year-on-year in May, after gaining 2.5% in April. The rate was the fastest in more than a year and came in line with expectations. On a monthly basis, consumer prices remained unchanged in May.
Food prices inflation climbed to 7.7% from 6.1% a month ago. Meanwhile, non-food inflation slowed slightly to 1.6% from 1.7%.
In U.S. economic news, a report from the Labor Department showed its consumer price index inched up by 0.1% in May after rising by 0.3% in April. The uptick in prices matched economist estimates.
Excluding food and energy prices, core consumer prices also edged up by 0.1% for the fourth consecutive month. Economists had expected core prices to rise by 0.2%.
The material has been provided by InstaForex Company – www.instaforex.com