Gold prices continue their uptrend on Tuesday as the protracted trade war between the United States and China intensified after Washington designated Beijing a currency manipulator, prompting a flight towards safe-haven assets.
The price of spot gold rose by 1.3% to 1,464.59 USD per ounce at 07:20 a.m. ET, while the US gold futures climbed to 1,476.85 USD per ounce.
The strong impetus to the gold price came from the tensions between the US and China, which cause sell-off on global stocks markets. The US Treasury Department said on Monday it had determined for the first time since 1994 that China was manipulating its currency, and that Washington would engage the International Monetary Fund to eliminate unfair competition from Beijing. The US action comes after China allowed its yuan to weaken past the key 7-per-dollar level on Monday for the first time in more than a decade, following Trump’s decision to impose 10% tariffs on 300 billion USD of Chinese imports, ending a month-long trade truce.
Gold priced in sterling soared to a record high on Monday, spurred by fear of a disorderly British exit from the European Union amidst trade tensions.
However, India’s gold imports in July plunged 55% from a year ago to the lowest level in three years as a rally in local prices to a record high and a hike in import taxes curtailed demand, a government source said on Monday. Lower purchases by the world’s second-biggest consumer could cap gains in global prices that jumped to the highest level in over 6-years on Monday but help the south Asian country in bringing down the trade deficit and supporting the rupee. India imported 39.66 tonnes of gold in July, down from 88.16 tonnes a year ago. In value terms, the country’s imports in the month fell 42% to 1.71 billion USD.
Local gold prices jumped to record highs last month tracking gains in overseas market and as New Delhi raised import taxes on the precious metal to 12.5% from 10% earlier. The surprise hike in the import tax and price rise badly affected demand last month, said Mukesh Kothari, director at dealer RiddiSiddhi Bullions in Mumbai.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.53% to 835.16 tonnes on Monday from 830.76 tonnes on Friday.
Among other precious metals, the silver inched higher by 0.27% to 16.39 USD per ounce, while palladium is up by 0.53% to 1,435.50 USD per ounce.
Gold price analysis
Having jumped to fresh multi-year tops earlier this Tuesday, gold witnessed some intraday profit-taking and has now retreated back closer to the 1,460 USD level.
An intraday turnaround in the global risk sentiment was seen as one of the key factors that weighed on the precious metal’s safe-haven demand and prompted some profit-taking, especially after the recent upsurge from the key 1,400 USD psychological mark.
The uptrend may be expected to continue, while gold is trading above support level 1,459.50 USD, which will be followed by reaching resistance level 1,470.50 USD. A downtrend will start as soon, as the pair drops below support level 1,459.50 USD, which will be followed by moving down to support level 1,452-1,446 USD.
The uptrend may be expected to continue, while pair is trading above support level 1,452.70 USD, which will be followed by reaching resistance level 1,470.50 USD and if it keeps on moving up above that level, we may expect the pair to reach resistance level 1,488 USD. An uptrend will start as soon, as the pair rises above resistance level 1,446 USD, which will be followed by moving up to resistance level 1,430 USD and if it keeps on moving down below that level, we may expect the pair to reach support level 1,414 USD.