Wednesday, 29 May 2019

Gold steady as global economy fears buoy safe-haven assets


Gold held steady on Wednesday as worries about the global economic outlook kept investors focused on safe-haven assets, with no signs of an easing in the Sino-U.S. trade-war.

Spot gold was unchanged at $1,279.12 per ounce, as of 0123 GMT, having fallen from Monday's 1-week peak of $1,287.32 in the previous session.

U.S. gold futures were up 0.2% at $1,279.70 an ounce.

Asian shares stumbled on Wednesday and global bonds rallied as investors fretted over the outlook for world growth with trade tensions between Washington and Beijing showing no signs of abating.

U.S. President Donald Trump on a Monday news conference with Japanese Prime Minister Shinzo Abe said he was "not ready to make a deal with China," which came as a fresh blow to hopes of a resolution in the trade war between the two largest economies in the world.

Elsewhere, Italian Deputy Prime Minister Matteo Salvini on Monday said the European Commission could fine Italy 3 billion euros for breaking EU debt and deficit rules, casting a shadow about the future of the European region.

The dollar which was also buoyed overnight by escalating concerns remained capped on Wednesday due to lower U.S. Treasury yields. [USD/]

Last year, the dollar overtook gold as the preferred safe-haven when the United States and China were engaged in a full-blown trade war.

The Trump administration said on Tuesday that no major trading partner met its currency manipulation criteria but nine countries, including China, required close attention as Washington presses tariffs and negotiations to address trade deficits.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.20% to 737.34 tonnes on Tuesday from 738.81 tonnes on Friday.

Authorities from Mexico's Zacatecas state hope to mediate an agreement to end a two-month blockade at the Penasquito gold mine between mining firm Newmont Goldcorp Corp and villagers in San Juan de Cedros.

Elsewhere, Sibanye-Stillwater and Lonmin cleared the final hurdle to forming the world's second-largest platinum producer as their shareholders approved the South African firm's 226 million pound ($286 million)takeover of its London-listed rival.

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