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Gold Prices Find a Bottom Just Below $1,500

Investing.com -- After four days of declines, gold prices appeared to find a temporary bottom just below $1,500 a troy ounce on Tuesday as a combination of weak data and unsettling words from China capped appetite for risk assets.

Prices for gold delivery on the Comex exchange bottomed earlier at $1,494.45 a troy ounce, down some 4% from the six-year high that they hit last week. However, by 10 AM ET, they had recovered to $1,505.45, down a more modest 0.4% on the day.

Spot gold traded at down 0.1% at $1,497.01.

The recovery followed more low-level sniping between China and the U.S. over their trade dispute which served as a reminder of how far the two are from a settlement, despite scheduling talks for early next month.

The rally in other havens also appeared to run out of steam, with the 30-Year Treasury bond yield rising to 2.13% and the 10-Year note rising as high as 1.66%, its highest in over three weeks.

Earlier Wednesday, Citigroup analysts forecast in a note to clients that gold would hit new records in the next two years, as the Federal Reserve gradually cuts official U.S. interest rates to zero.

“We expect spot gold prices to trade stronger for longer, possibly breaching $2,000 an ounce and posting new cyclical highs at some point in the next year or two,” Bloomberg quoted analysts including Aakash Doshi as saying. The previous all-time high of $1,921.17 was set in 2011, also at a time when Fed interest rates were effectively at zero.

Retail interest in gold has increased just at a time when institutional buying - particularly from central banks - appears to be at least temporarily slowing down. Bloomberg reported on Monday that assets under management at Blackrock's iShares Gold Trust rose by over $96 million last week, a 13th straight weekly gain and the longest such run for the ETF since 2013. However, the most recent data showed the People's Bank of China reduced its purchases of gold in August.

Elsewhere in metals, silver futures rebounded 0.4% to $18.24 an ounce, while platinum futures fell 1.3% to $940.30.

Copper futures fell 0.3% to $2.62 a pound.

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