Gold Prices Buoyed By Weaker Dollar, Asian Stocks
Gold prices recovered from a seven-month low on Monday. Gold prices recovered from a seven-month low on Monday, after sluggish GDP data from China weighed on Asian stocks and as the dollar traded below its recent highs.
Spot Gold was up 0.2 percent at $1,243.36 an ounce at 0345 GMT, after marking the lowest since Dec. 12 at $1,236.58 on Friday. U.S. Gold futures for August delivery were 0.2 percent higher at $1,243.40 an ounce.
The dollar seesawed versus the Chinese yuan even as official data on Monday showed China’s GDP slowed in the second quarter as expected. Against a basket of six major currencies, the greenback traded below a 10-day peak.
A weaker dollar makes greenback denominated gold cheaper for holders of other currencies. The absence of increased rhetoric out of Beijing or Washington over the weekend likely gave the CNH a bit of reprieve, the trader said, adding that technically gold was under pressure and would still be sold on rallies toward $1,250.
Asian shares were lower on Monday after data pointed to slowing growth in the world’s second-largest economy, and as investors remained cautious over the impact of the heated Sino-U.S. trade war.
Gold prices, which can gain in times of political uncertainty, have failed to benefit from the ongoing trade dispute.
The Federal Reserve on Friday pointed to “solid” U.S. economic growth during the first half of the year in its semi-annual report to Congress, where it also reiterated that it expected to continue to raise interest rates gradually.
Higher U.S. rates tend to boost the greenback and push bond yields up, weighing on non-interest bearing gold.
Trade Suggestion Buy Gold At: 1241.60, Take Profit At: 1243.06, Stop Loss At: 1240.85