Gold at two-week high on trade deal hopes; palladium peaks1 min read . Updated: 18 Feb 2019, 10:24 AM IST
- US gold futures rose 0.4 percent to $1,327.8 an ounce
- Palladium hit a record high of $1,449 an ounce and stayed in a broad $20 range in early trade
BENGALURU : Gold prices rose to their strongest level in more than two weeks on Monday as the dollar weakened on hopes the United States and China are nearing a trade deal, while palladium hit a record high.
Spot gold had gained 0.3 percent to $1,324.80 per ounce by 0324 GMT, just below a 9-month peak of $1,326.30 an ounce marked on Jan. 31.
US gold futures rose 0.4 percent to $1,327.8 an ounce.
"Alleviation of risks around the trade talks has certainly benefited the markets," said ANZ analyst Daniel Hynes, adding that signs of progress in the discussions had reduced appetite for the dollar, which has been supporting gold.
The dollar was marginally weaker on Monday, as increasing expectations of a US-Sino trade deal led investors to shift away from the safety of the greenback, which had been the preferred safe-haven during the trade dispute.
The United States and China will resume trade talks this week in Washington with time running short to ease their bruising trade war, but US President Donald Trump repeated on Friday that he may extend a March 1 deadline for a deal and keep tariffs on Chinese goods from rising.
Spot gold prices have risen about 3.3 percent so far this year on hopes that the world's two largest economies will hammer out a truce and on expectations the U.S. Federal Reserve will pause its cycle of interest rate hikes.
Minutes of the Fed's January policy meeting are due on Wednesday and should provide more guidance on the likelihood or not for rate hikes this year.
"Looser monetary policies are generally favourable to gold, which has benefited since the Fed paused its tightening path," said Nicholas Frappell, global general manager, ABC Bullion.
"The market will be looking closely at U.S. and China data and I think gold will target a retest of the $1,326 level again."
Meanwhile, palladium hit a record high of $1,449 an ounce and stayed in a broad $20 range in early trade.
"In combination with supply-side issues, the market is going to be in a sizeable deficit this year ... potential for better-than-expected demand from China will exacerbate that tightness," ANZ's Hynes added.
Platinum rose 0.4 percent to $805.50 per ounce, near two-week high. Silver was up 0.2 percent at $15.80 per ounce.
This story has been published from a wire agency feed without modifications to the text.