Investing.com - Gold prices slipped on Wednesday as the dollar pushed higher amid renewed concerns over the prospect of a trade war between the U.S. and China and after steep falls on Wall Street and in Asia led by a selloff in tech stocks.
Gold futures for April delivery on the Comex division of the New York Mercantile Exchange slid $1.7 or 0.13% to $1,340.30 a troy ounce by 05:13 AM ET (09:13 GMT).
Demand for the dollar was underpinned amid renewed fears over the prospect of trade war between the U.S. and China after the state run Chinese newspaper the Global Times reported Wednesday that Beijing will soon announce a list of tariffs on U.S. exports to China in response to proposed U.S. tariffs on Chinese imports.
Reports that U.S. President Donald Trump discussed China’s trade practices with German Chancellor Angela Merkel and French President Emmanuel Macron also dented hopes that the risk of a trade war was easing.
Investors’ fears that trade tensions between the world’s two largest economies could escalate out of control and deal a blow to the global economy.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.18% to 89.12, pulling away from Tuesday’s five-week low of 88.53.
A stronger dollar makes the dollar-denominated metal more expensive for holders of other currencies.
Recent worries that protectionist trade policies from the U.S. and China might result in a trade war have boosted gold, amid fears over the impact on global economic growth.
Investors were also monitoring stock moves after a tech turnaround saw Wall Street reverse an early rally on Tuesday to close sharply lower. The drop in the U.S. also filtered through to Asia and Europe.
Traders were looking ahead to a final revision of U.S. fourth quarter growth and data on pending home sales later in the day.
Indications last week that the Federal Reserve is likely to stick to its plan for gradual interest rates increases and is still projecting three rate hikes this year have supported gold, which struggles to compete with yield-bearing assets when interest rates rise.
In other precious metal trade, silver futures were down 0.49% at $16.460 a troy ounce, while platinum futures shed 0.65% to trade at $946.10.
Among base metals, copper futures were down 0.65% to $2.981 a pound.
Prices have fallen almost 9% so far this year after hitting a nearly four-year high in December, pressured lower by weak economic data out of China, the world’s largest copper consumer, and worries about trade tensions.