Gold climbs as dollar dips

London : Gold edged higher yesterday, helped by weakness in the dollar after a trade deal was struck between the United States and Mexico but analysts said ongoing US-China tensions would continue to weigh. The United States and Mexico agreed on Monday to overhaul the North American Free Trade Agreement (NAFTA). The dollar was pinned at its lowest in nearly a month against a basket of major currencies, while riskier assets such as equities rose. A weaker US currency generally boosts demand for dollar-denominated commodities.

“The main trade dispute, meaning US-China conflict, is still going on so this NAFTA deal is just a small aspect,” said Commerzbank analyst Daniel Briesemann, adding that the effects on gold markets would be limited. Spot gold rose 0.1 per cent to $1,212.65 an ounce by 1407 GMT after snapping a six-day losing streak in the previous session and touching a two-week high. US gold futures for delivery in December were up 0.3pc at $1,219.10.

Short-covering could kick in if gold breaks above $1,220, Kitco Metals analyst Peter Hug said. Spot silver was up 0.2pc at $14.88 while platinum rose 0.7 percent to $805 after touching a two-week high of $810. Palladium rose 0.4pc to $952.50, having touched $956, its highest since July 10. The NAFTA deal, which includes new rules for the car industry, lifted platinum and palladium because of their use in auto catalysts.