LONDON. – Gold prices edged lower on Tuesday, having surged in the previous session as falling US stock markets and fears of a global trade war pushed investors towards safer assets. Spot gold was down 0,3 percent at $1 337.07 an ounce at 1231 GMT after rising 1,3 percent. US gold futures were 0,4 percent lower at $1 341.20 an ounce.
“There’s a lack of conviction that prices will rise much further or can sustain levels of $1,350. Profit taking started here so we are back below $1,340.”
Gold has struggled to break from a trading range of $1,310-$1,360 since the start of the year.
The Trump administration is meanwhile expected this week to unveil a list of advanced technology Chinese imports targeted for US tariffs after Beijing on Monday raised tariffs on 128 US products, escalating a dispute between the world’s two largest economies.
Funds have raised their bets on higher prices, with the net long position on the Comex exchange rebounding from a three-month low.
Speculative investors have room to expand their long positions further, which would help drive prices higher, analysts at Citi said in a note.
Higher market volatility and rising tension between Washington and Beijing will likely hold gold above $1 300 throughout 2018, they said.
“We assign a 30 percent probability that gold prices can scale $1,400 an ounce this year.”
Momentum indicators suggested gold prices would rise, with technical Fibonacci support at $1 317.25 and resistance at $1 361.80, analysts at ScotiaMocatta said in a note. – Reuters.