Gold dips further from near 6-week peak as dollar firms

London (Reuters): Gold eased yesterday (28 March) as a recovery in the dollar pulled prices further from the previous day’s near six-week peak, though a drop in equities on the back of jitters over a US-China trade stand-off kept the metal underpinned.

The dollar pulled back some lost ground against a currency basket after sliding to its lowest since mid-February on Tuesday (27 March), supported by hopes that negotiations between the United States and China would avoid a full-blown trade war. Spot gold was down 0.6% at $1,336.84 an ounce at 1230 GMT, while US gold futures for April delivery were down 0.5% at $1,341.50 an ounce.

“Despite the fact that the equity markets are near a cliff, we have not seen much interest amidst retail investors for gold and the strength of the dollar index is also weighing on the price,” Think Markets chief market analyst Naeem Aslam said. “However, given the geopolitical uncertainties we have, we do think that the path of least resistance is skewed to the upside.” 

Spot gold touched its highest since mid-February on Tuesday before pulling back to end the day down 0.6%, its biggest one-day loss in two weeks. The metal is set to close the first quarter up 3%.