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PRECIOUS-Gold eases on firmer equities, U.S.-China row limits fall

Published 15/07/2020, 07:57 pm
© Reuters.
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* SPDR Gold Trust holdings rise to over 7-year highs

* Stocks gain on optimism over COVID-19 vaccine

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Adds comments, updates prices)

By Eileen Soreng

July 15 (Reuters) - Gold prices on Wednesday retreated from a one-week high hit earlier in the session as other assets rose, but was kept above the key $1,800 level by simmering U.S.-China tensions and mounting coronavirus cases.

Spot gold XAU= dipped 0.1% to $1,805.97 per ounce by 1215 GMT, having hit its highest since July 9 at $1,814.40. U.S. gold futures GCv1 were down 0.3% at $1,807.70.

"Hopes of a vaccine are giving all markets a lift and gold is suffering a little bit on the back of that," said Michael Hewson, chief market analyst at CMC Markets UK.

But gold will be bought on dips with rising infection rates, fears of a second wave of coronavirus and U.S.-China tensions driving prices higher, Hewson added.

World shares climbed towards a four-month high driven by optimism surrounding an experimental vaccine for COVID-19 produced by U.S. company Moderna MRNA.O . MKTS/GLOB between the United States and China limited gold's decline.

U.S. President Donald Trump signed an executive order ending preferential treatment for Hong Kong and China responded by saying it would impose retaliatory sanctions on the United States. also shut the door on "Phase 2" trade negotiations with Beijing. supporting gold prices, the dollar .DXY fell 0.4% versus a basket of currencies. USD/

"As long as prices remain above the $1,800 level, gold has the potential to test $1,815 and a fresh multi-year high at $1,825, respectively," FXTM analyst Lukman Otunuga said in a note.

"Should $1,800 prove to be unreliable support, the precious metal may experience a technical correction back towards the $1,765-$1,780 region before bulls gather fresh momentum."

Reflecting appeal for gold, holdings of the SPDR Gold Trust GLD exchange-traded fund were near their highest since April 2013. GOL/ETF

Elsewhere, palladium XPD= was steady at $1,959.91 per ounce, platinum XPT= was 0.9% higher at $833.67 and silver XAG= gained 0.4% to $19.27.

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