* Trump says he will hike U.S. tariffs on Chinese goods this
* SPDR gold holdings fall to lowest since Oct. 11
* Asian, European stocks tumble
May 6 (Reuters) – Gold prices climbed on Monday after U.S.
President Donald Trump threatened to raise tariffs on Chinese
goods, escalating Sino-U.S. trade tensions, which prompted
investors to sell riskier assets and boost safe-haven bullion.
Spot gold was up 0.2 percent at $1,281.63 per ounce,
as of 0930 GMT. U.S. gold futures also gained 0.2
percent to $1,283.20 an ounce.
U.S. President Donald Trump on Sunday announced he would
hike tariffs on $200 billion worth of Chinese goods this week.
He also said he would target a further $325 billion of Chinese
goods with 25 percent tariffs “shortly”, essentially covering
all products imported into the United States from China.
“We are seeing the markets reacting to uncertainty about
trade talks. It is creating some nervousness in the markets. The
dollar is a tad stronger, countering some of the potential moves
we would have seen otherwise in gold,” said Ole Hansen,
commodity strategist at Saxo Bank.
Trump’s comments dented global shares and oil prices, while
boosting the yen, which like the yellow metal, is considered a
safe haven during times of a geopolitical or global economic
turmoil. “The hedge fund community is extremely confused, flipping
long and short positions. $1,290 is the key level for gold, and
if prices break above that we could see quite an addition on the
long side,” Hansen said.
Hedge funds and money managers switched to a net long
position in COMEX gold in the week to April 30, the U.S.
Commodity Futures Trading Commission (CFTC) said on Friday. Last week, the mood among gold investors had turned gloomy,
pushing the metal to a four-month low after the U.S. Federal
Reserve Chairman Jerome Powell dashed hopes of a rate cut this
“Despite the increase in gold prices (on Monday), technical
analysis suggests that downward pressure on the yellow metal
continues to manifest,” OCBC analysts said in a research note,
adding that most of the intra-day move was likely related to
covering short positions and hedging against market risks.
“The medium term still suggests a large range-bound
consolidation of $1,270 to $1,300.”
Meanwhile, holdings of SPDR Gold Trust, the world’s
largest gold backed exchange, were at their lowest since Oct.
11. Holdings fell 0.6 percent on Friday. However, physical demand for the metal had been robust last
week with India and Singapore leveraging the correction in
prices ahead of a key gold-buying festival. Elsewhere, silver slipped 0.5 percent to $14.85 per
ounce, while platinum fell 0.6 percent to $863.94 per
Palladium dropped 0.6 percent to $1,363.40 an ounce.
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