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Gold prices edge up on trade fears, rate cut hopes

Published 2019-06-06, 03:37 a/m
© Reuters.  Gold prices edge up on trade fears, rate cut hopes
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* SPDR Gold holdings fall 0.3% on Wednesday

* Spot gold might fall to $1,315-$1,321/oz- technicals

* Silver market may be bottoming- HSBC

By Brijesh Patel

June 6 (Reuters) - Gold prices edged higher on Thursday, hovering below the 15-week high hit in the previous session, supported by trade worries and a possible U.S. rate cut, even as some investors locked in profits in bullion after a recent rally.

Spot gold XAU= was up 0.3% to $1,333.58 per ounce as of 0727 GMT, after hitting its highest level since Feb. 20 at $1,343.86 on Wednesday.

U.S. gold futures GCv1 rose 0.3% to $1,337.20 an ounce.

"In the longer run, gold is going to sustain this bull run. We are looking at the shift in the Fed policy. The Fed's dovish signal will obviously boost gold prices and weaken the dollar," said Benjamin Lu, an analyst with Singapore-based Phillip Futures.

Investors booked some profits after gold prices surged around $70 in the past five sessions, Lu said.

Recent weak economic reports out of the United states further bolstered bets for an interest rate cut by the U.S. Federal Reserve.

Data on payrolls showed U.S. private employers hired at the slowest pace in more than nine years in May, weakness that analysts blamed on heightening global trade tensions. on the trade front, Mexican and U.S. officials are set to resume talks in Washington on Thursday aimed at averting an imposition of tariffs on Mexican goods.

However, President Donald Trump said "not enough" progress was made on ways to curb migration when the two sides met on Wednesday. the technical side, Spot gold may go back into a range of $1,315-$1,321 per ounce, according to Reuters technical analyst Wang Tao.

The fall from the Wednesday high of $1,343.86 could be deep enough to signal a reversal of the uptrend from the May 30 low of $1,274.44, Tao said. of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, fell 0.3% to 757.59 tonnes on Wednesday from Tuesday. GOL/ETF

In other precious metals, silver XAG= gained 0.5% to $14.88 per ounce after touching a more than one-month high of $15.04 in the previous session.

"Greater financial market volatility or increase in trade or geopolitical risks may stoke safe haven demand, especially if gold is also rallying," HSBC analyst James Steel said in a note.

"We still look for silver to gain and forecast an average price of $15.27 for 2019 with a range of $13.90-$16.45, suggesting the market is bottoming."

Palladium XPD= rose 0.8% to $1,339.03 an ounce, while platinum XPT= climbed 1.1% to $807.40, having hit a near three-week high at $832.63 on Wednesday.

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