Gold prices inched up on Thursday as the latest developments in the US-China trade row led to a slight retreat in the dollar, but was still near a six-month low hit in the previous session.
24k gold was priced at Dh 151.75 in Dubai and 22k can be bought at Dh142.50.
Spot gold was 0.1 per cent higher at $1,252.74 an ounce, as of 0400 GMT. In the previous session, the metal touched $1,250.30, its lowest since mid-December.
US gold futures for August delivery were down 0.2 per cent at $1,254.20 an ounce.
“There’s a little bit of a pullback in the US dollar, so that explains some recovery in gold,” said Helen Lau, analyst at Argonaut Securities.
A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies.
The dollar held steady against its rivals on Thursday, though it failed to build on overnight gains amid conflicting signals from Washington on a proposal to restrict Chinese investment as the bitter US-China trade row kept financial markets on edge.
US President Donald Trump on Wednesday said he will use a strengthened national security review process to thwart Chinese acquisitions of sensitive American technologies, a softer approach than imposing China-specific investment restrictions.
However, gold prices which usually rise in times political and economic uncertainty, have gained little support from these trade tensions, while expectations that the US Federal Reserve will hike interest rates have pressured bullion.
“The dollar may continue to strengthen because of rising US interest rates and yields. That is all the key reason that makes holding gold unattractive,” Lau added.
Boston Federal Reserve President Eric Rosengren on Wednesday said the central bank should continue to gradually raise interest rates to lower the risk of a major policy error.
The US economy is growing at a 4.5 per cent annualized rate in the second quarter following the latest data on home sales and advance trade balance released this week, the Atlanta Fed’s GDPNow forecast model showed.
The Fed is expected to raise interest rates at least four times this year, which will likely dent gold prices.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.36 per cent to 821.69 tonnes on Wednesday.
In other precious metals, spot silver was 0.4 per cent higher at $16.10 an ounce.
Palladium rose 0.3 per cent to $950.45 an ounce, while platinum fell 0.3 per cent to $853.80 per ounce.
This article provided by NewsEdge.