Gold prices rose on Wednesday as uncertainty over U.S.-China trade relations and global economic concerns bolstered safe-haven demand, with a weaker dollar providing additional support.
Spot gold rose 0.6% at $3,370.67 an ounce as of 0209 GMT. U.S. gold futures were up 0.5% to $3,394.90.
“We potentially see dip-buyers coming back into the picture and if you look at today’s Asia session, rally also has been attributed to this dollar-strength unwinding as well,” said Kelvin Wong, a senior market analyst, Asia Pacific at OANDA.
“Things are still uncertain, especially surrounding the trade relationship between China and U.S. and even in EU and U.S. as well.”
Gold is considered a safe-haven asset during economic uncertainties.
The U.S. should create the necessary conditions for bilateral relations to get back onto “the right track,” China’s Foreign Minister Wang Yi told the U.S. ambassador to Beijing on Tuesday.
The White House signaled that President Donald Trump and Chinese President Xi Jinping might engage in talks later this week to address the trade disagreements.
Meanwhile, the U.S. announced it would forgo doubling steel and aluminum tariffs on Britain.
The U.S. dollar index fell 0.1%, making greenback-priced bullion less expensive for overseas buyers.
Global economic concerns deepened after the Organisation for Economic Cooperation and Development (OECD) warned on Tuesday of sharper-than-expected economic slowdown, as the Trump administration’s trade policies weigh heavily on the U.S. economy.
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“(The OECD report) for sure will be another supporting factor to see safe demand being heated up as well from a medium-term perspective,” Wong said.
Economic data showed U.S. job openings rose in April, though layoffs surged to their highest level in nine months, hinting at softening labor market conditions.
Federal Reserve officials reiterated their cautious policy stance on Tuesday, citing risks from trade tensions and economic uncertainty.
Elsewhere, spot silver rose 0.3% to $34.59 an ounce, platinum was up 0.5% to $1,079.62 and palladium was steady at $1,009.94.
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