Investing.com - Gold prices edged down on Tuesday in Asia despite intensifying trade tension between the U.S. and China.
Gold futures for June delivery, traded on the Comex division of the New York Mercantile Exchange, were down 0.1% at $1,282.45 per ounce by 12:20 AM ET (04:20 GMT).
The precious metal seems to have found a base around $1,270, analysts with TD Securities said in a note on Monday.
“Gold is set to improve and trend toward $1,300,” analysts said. “Lower rates, a flat curve and a growing likelihood of rising equity market volume are all factors helping gold … suggesting buying the dips may well be the order of the day in the precious space.”
A more dovish perception of the Federal Reserve is also tailwind for gold, TD Securities noted, adding that the U.S. central bank could cut rates sooner than expected after the release of weaker-than-expected U.S. data last Friday.
“The risk from a slower global economy will drive the Fed to cut sooner rather than later, keeping the global yield curve flat and interest rates low,” TD Securities explained. “The FOMC minutes suggested rates will be on hold even if the economy improves, which has seen the USD strength abate, while rates continue to price a cut as the curve moves back into inversion, helping gold recover off the lows.”
On the trade front, U.S. President Donald Trump said on Monday in a news conference with Japanese President Shinzo Abe that he was “not ready to make a deal with China”, the latest blow to hopes that the two sides could reach an agreement in the near future.
Traders also paid close attention to Brexit developments after U.K. Prime Minister Theresa May announced her decision to resign on Friday.