May 26, 2020 5:27:39 pm
Gold prices edged lower on Tuesday as hopes of economic recovery lifted share markets with many countries easing coronavirus-driven lockdowns, although Sino-US tensions over Hong Kong limited bullion’s losses.
Spot gold was down 0.2% at $1,725.25 per ounce by 1046 GMT. US gold futures fell 0.6% to $1,724.60.
“We are seeing US stocks breaking key levels to the upside, so that is adding bit of selling pressure to gold which has otherwise been supported by the recent geopolitical worries related to Hong Kong,” said Saxo Bank analyst Ole Hansen.
“Right now, there is no key driver as such for gold and that basically raises the risk of a correction or renewed period of consolidation.”
European shares hovered near an 11-week high, while US stock futures rose 2% and breached a major chart barrier as businesses worldwide gradually reopened following a months-long lockdown.
However, offering some respite to gold were brewing trade tensions between the United States and China over a new security law to be enforced in Hong Kong.
White House National Security Adviser Robert O’Brien warned that the proposed legislation could lead to US sanctions on Hong Kong and China, and threaten the city’s status as a financial hub.
Gold is often used as a safe store of value during times of political and financial uncertainty.
“On the technical side, only a clear recovery of $1,750 would open space for further rallies, while a decline below $1,725 would increase the likelihood of another test of $1,700 and potentially down to $1,671-$1,675,” ActivTrades chief analyst Carlo Alberto De Casa said in a note.
Market participants are waiting for the US consumer confidence report due at 1400 GMT.
Elsewhere, palladium dropped 2% to $1,950.97 per ounce and platinum fell 0.4% to $835.31, while silver jumped 0.8% to $17.33.
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