Gold Slips, USD Up

Gold slipped on Tuesday as concerns over an escalating trade conflict between the United States and China battered emerging market currencies and prompted investors to seek perceived safety in the dollar. A stronger dollar makes dollar-priced gold costlier for non-US investors, Livemint reported. The dollar index rallied as the public comment period on a US proposal for new tariffs on Chinese goods is set to end Thursday, after which Washington can follow through on plans to impose tariffs on $200 billion more of Chinese imports. Emerging market currencies such as the Argentine peso, Turkish lira, South African rand, Brazilian real, Indonesian rupiah and Indian rupee sank as investors fear these export-oriented economies will be caught in the escalating trade conflict. Also, the US dollar’s status as the chief reserve currency makes it the primary beneficiary of trade conflicts. “As long as the dollar focus remains strong upside potential seems limited (for gold),” said Saxo Bank’s head of commodity strategy Ole Hansen. Platinum was down 1.2% at $770, while palladium was down 1.7% at $961.97, after hitting an 11-week high of $985.50 on Monday.