Gold given respite by planned US, China trade talks

Friday, 17 August 2018 00:10 - - {{hitsCtrl.values.hits}}

LONDON (Reuters): Gold prices bounced from 19-month lows on Thursday as the dollar slipped on news that China and the United States will hold trade talks this month, although sentiment remained negative.

Spot gold was up 0.3% at $ 1,177.68 an ounce at 1335 GMT from an earlier low of $ 1,159.96, its weakest since January last year. US gold futures were unchanged at $ 1,185 an ounce.

Gold prices have tumbled more than 10% since their April peak above $ 1,365 an ounce.

The meeting between a Chinese delegation and US representatives offers hope for progress in resolving the trade conflict that has unnerved financial and commodity markets in recent weeks.

Political and economic uncertainty have seen investors opt for the safety of US Treasuries and the US currency, which when it rises makes dollar-denominated gold more expensive for holders of other currencies, potentially subduing demand.

The dollar has gained about 8% against a basket of other major currencies since the middle of February.

Part of the reason behind its ascendancy has been higher interest rates in the United States and the prospect of more to come this year and next.

Higher interest rates raise the cost of holding gold, which earns nothing and needs money to store and insure.

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