3minutos - Source: CNBC
Dario Pignatelli | Bloomberg | Getty Images
Spot gold rose 0.2% to $1,483.53 per ounce. U.S. gold futures were up 0.3% at $1,487.20.
In a move that soured ties between the United States and China on Tuesday, the U.S. House of Representatives passed four pieces of legislation taking a hard line on Beijing, three related to pro-democracy protests in Hong Kong, drawing opposition from China.
“A lot of people think this (U.S. legislation on Hong Kong) is going to hinder the negotiations with the tariffs (between U.S.-China), so again, when the tariffs are questionable, people run to gold,” said Michael Matousek, head trader at U.S. Global Investors.
Analysts are also wary of the situation in Europe as they await the outcome of the Brexit summit in Brussels on Thursday and Friday which will determine whether Britain is headed for a deal to leave the bloc on the due date, a disorderly no-deal exit or a delay.
Also helping gold, U.S. equity markets opened lower as positive earnings offset cautious traders worried about the legislation targeting Hong Kong.
Investors also await the U.S. Federal Reserve meeting at the end of the month for clarity on further interest rate cuts.
Indicative of sentiment, holdings of the world’s largest gold-backed ETF, SPDR Gold Shares, fell on Tuesday to 919.66 tonnes, but held close to their highest level in nearly three years.
Elsewhere, palladium rose 2.4% to $1,774.32 an ounce, after hitting a record high of $1,779.23 earlier.
The metal used in vehicle exhausts to reduce harmful emissions has climbed about 40% so far this year on a sustained supply crunch.
“It (palladium) has been on a great uptrend and more technical than anything else. Same as gold, if anything is rallying the way it is - 20-year or 1-year the trend looks great and people want to own it, bringing more momentum players into the trade. The driver behind is about 75% technical and 25% fundamental,” U.S. Global Investors’ Matousek added.
Silver fell 0.4% to $17.30 per ounce and platinum slipped 0.9% to $880.23.