Gold Prices Rise in Risk-Off Trade

Published 05/27/2019, 01:22 AM
© Reuters.
- - Gold prices rose on Monday in Asia as fears over the escalating U.S. - China trade spat underpinned safe haven demand for the precious metal and weak U.S. economic data bolstered expectations for a Federal Reserve rate cut.

Gold futures for June delivery, traded on the Comex division of the New York Mercantile Exchange, were up 0.2% at $1,286.55 per ounce by 1:20 AM ET (05:20 GMT).

Market sentiment was hit after disappointing U.S. economic data late last week fueled fears that the escalating trade and tech war between the U.S. and China is hitting growth.

The U.S. dollar index ticked up to 97.532, remaining below the two-year high of 98.260 reached last Thursday.

Brexit developments remained in focus after U.K. Prime Minister Theresa May announced her decision to resign on Friday, raising fresh questions about Britain’s divorce from the EU.

Gold's direction in the coming week would be decided by May's replacement, and whether the candidate will continue pushing for Brexit, said senior commodity analyst Barani Krishnan.

Traders said chances of a "no deal" Brexit scenario has increased as four of eight leadership hopefuls said the U.K. must leave the EU on Oct. 31 even if this means a no-deal Brexit.

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