On Monday, spot gold prices ended higher by 1.09 percent to close at $1299.7 per ounce. China’s announcement of retaliation pushed the risk appetite amongst investors in turn boosting the appeal for the safe haven asset. U.S. hiked the tariff rates last week to 25 percent on the 200 billion worth of Chinese goods imported in the United States. China has stated that it might retaliate with fresh round of tariffs on US imports in China which might further deteriorate the global scenario. However, China doesn’t have much of US good to impose duty on. The gains for Gold were capped as Trade dispute between U.S. & China weighed on China’s currency; yuan, raising demand concerns from the world’s largest metal consumer. The yuan declined the most in over 9 months making Gold expensive for Chinese buyers. However, declining Bond yields, global stocks along coupled with weaker Dollar kept the gold prices higher.
Outlook
We expect Gold prices to trade higher as China retaliation might further increase the demand for the bullions. On the MCX, gold prices are expected to trade higher today, international markets are trading marginally lower by 0.20 percent at $1299.15 per ounce.
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