After two days of losses, gold futures settled higher on Wednesday, riding on dollar’s weakness ahead of U.S. President Donald Trump’s trade talks with European Commission President Jean-Claude Juncker.
It is expected that the Trump – Juncker meeting will center around the tariffs on the auto industry. Recently, the European Commission had said that it would impose tariffs on imports worth $20 billion from U.S., if the Trump administration implemented its threat to impose tariffs on auto imports from Europe.
In a report released on Tuesday, the International Monetary Fund said that the U.S. dollar was over-valued because current account surpluses and deficits were becoming increasingly concentrated in advanced economies.
Gold was seen struggling to edge higher in recent sessions due to rising bond yields amid expectations of higher interest rates. Despite Trump’s ‘disagreement’ with the Fed on rate hikes, the central bank is widely expected to hike interest rates to keep inflation around target levels.
Gold futures for August settled at $1,231.80 an ounce, gaining $6.30 or 0.5%.
The dollar index declined to 94.17, losing 0.22 points or 0.23%, after advancing to 94.46 earlier in the session.
Silver futures for September settled at $15.589 an ounce, while copper futures added about 0.5% at $2.825 per pound.
On the U.S. economic front, data released by the Commerce Department showed a bigger than expected pullback in new home sales in the month of June.
The report said new home sales plunged by 5.3% to an annual rate of 631,000 in June after jumping by 3.9% to a rate of 666,000 in May. Economists had expected new home sales to fall by 2.8%.