By Swati Verma
BANGALURU (Reuters) - Gold prices edged downward on Tuesday as investors flocked to the dollar and U.S. government bonds amid steep declines in global stock markets, denting appeal for non-interest bearing bullion.
Spot gold > was down 0.3 percent at $1,220.01 per ounce at 1:35 p.m. EST (1835 GMT), putting it on course to snap a five-session winning streak.
U.S. gold futures
"It seems like most people are leaving the stock markets, flocking into bonds and ignoring the gold market at this moment," said Walter Pehowich, executive vice president of investment services at Dillon Gage Metals, adding that the precious metal was also under pressure from a stronger dollar.
The dollar rallied from a two-week low and benchmark U.S. Treasury yields dipped to seven-week lows as stock market declines boosted global demand for safe-haven U.S. Treasury debt and the dollar. [MKTS/GLOB] [US/]
A stronger dollar makes gold, which offers no yield to investors, more expensive for users of other currencies.
Global stock markets have suffered in the past two months, pressured by worries of a peak in corporate earnings growth, rising borrowing costs, slowing global economic momentum, and international trade tensions.
This has partially helped bullion prices recover about 6 percent from 19-month lows hit in mid-August. The yellow metal earlier on Tuesday hit its highest level since Nov. 7 at $1,228.79.
Fears of a slowing global economy, concerns surrounding Brexit and Italy's fiscal situation, and uncertainty regarding the China-U.S. trade negotiations are supporting gold prices, said Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York. "I expect gold to move lower if any of the current issues are resolved."
Investors are now keeping a close eye on a Group of 20 leaders' summit later this month in Argentina where U.S. President Donald Trump is expected to meet with Chinese President Xi Jinping to discuss the bilateral trade dispute.
While both leaders have expressed optimism about resolving their respective issues ahead of the meeting, a top Chinese diplomat in veiled criticism of Washington said on Monday that the APEC summit's failure to agree on a communique resulted from certain countries "excusing" protectionism.
Meanwhile, holdings at SPDR Gold Trust
Among other precious metals, silver > was down 1 percent at $14.28 an ounce, after hitting $14.49, its highest level since Nov. 8.
Palladium > fell 2 percent to $1,137.50 per ounce, after hitting a record high of $1,185.40 on Friday.
Platinum > dipped 1.8 percent to $837.50 per ounce.
Trading volumes are expected to remain subdued before the U.S. Thanksgiving holiday on Thursday.
(Reporting by Swati Verma and Nallur Sethuraman in Bengaluru; editing by Paul Simao and G Crosse)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
