Gold prices edged higher on Tuesday, extending recent gains, as equities tumbled and the greenback struggled against major currencies amid doubts about the U.S. and China finding a solution to end their trade disputes.
Stock prices plunged sharply on Wall Street, as the U.S. President Donald Trump's comments that more duties will be imposed on China if trade talks fell through triggered widespread selling.
The dollar index eased by about 0.16% as 10-year treasury yields declined to their lowest level since mid September.
Gold futures for February ended up $7.00, or 0.6%, at $1,246.60 an ounce, the highest settlement since July 25. On Monday, gold futures closed higher by $13.60, or 1.1%, at $1,239.60 an ounce.
Silver futures for March settled higher at $14.640 an ounce, while Copper futures for March ended weak at $2.759 per pound. On Monday, silver futures settled at $14.499 an ounce, while Copper futures closed at $2.8095 per pound.
Investor sentiment was upbeat on Monday as trade war concerns subsided after the U.S. and China agreed on a 90-day truce on Saturday following a meeting between Donald Trump and Xi Jinping at the G20 summit in Argentina. However, the buoyant sentiment has now faded due to uncertainty about the two countries managing to work out a deal before the expiry of the truce period.
The dollar stayed sluggish and was hovering around previous closing levels, as traders continued to speculate that interest rate hikes may not be frequent next year as earlier thought. The minutes of the central bank's November meeting released last Thursday and the Fed Chair Jerome Powell's comments a day earlier that interest rates were "just below" neutral have raised prospects of a pause in monetary tightening sometime soon.
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