Gold Silver Reports (GSR) – Spot gold may break a support at $1,337 per ounce and fall to the next support at $1,324.
Gold prices pared gains on Tuesday after U.S. President Donald Trump confirmed he would meet with Chinese President Xi Jinping at an international summit, fanning hopes that an end to the U.S.-China trade dispute could be nearing.
Earlier in the session, gold prices had briefly surged to 1% after central banks in Europe and the United States hinted at monetary easing.
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Spot gold gained 0.2% to $1,342.15 per ounce by 10:44 a.m. EDT (1444 GMT). Prices had risen to $1,354.20 earlier, before Trump said in a tweet he had a “very good telephone conversation” with China’s Xi.
The two leaders will meet at the G20 meet later this month in Japan, where the discussions will focus on trade in the midst of a bitter tariff spat, that has upset global markets since its conception a year ago.
U.S. gold futures was up 0.2% to $1,345.60 per ounce.
“We are seeing a bit of a resurgent in risk appetites… ,” said Bart Melek, head of commodity strategies at TD Securities in Toronto, adding that equities have moved higher, which has helped the dollar.
“Commodities on the risk side have gone up and gold has traded lower, on the back of the agreement between the U.S. and China on the trade side.”
Equity markets rallied following Trump’s comments while the dollar index held tight at two week highs.
European Central Bank President Mario Draghi said the bank would need to ease policy again amidst tepid inflation, while markets expect the U.S. Federal Reserve to cut interest rates later this year.
“Traders are looking at an immediate future for easing money from central banks, which should see gold trading higher for the time being,” said Bob Haberkorn, senior market strategist at RJO Futures.
“As long as gold hold the $1,333 level intraday, it is good for bullion… prices ran up after the expectations from central banks, but there has been no definitive answers to retain those levels on an intraday basis,” said Michael Matousek, head trader at U.S. Global Investors.
Other precious metals saw gains as well, with silver gaining 0.6% to $14.93 per ounce and platinum up 0.8% to $798.31.
