Fundamental Comment

Gold resumes drop after hitting $1300 psychological level

Gold resumes drop

Gold prices fell on Thursday as it faced resistance near the psychological level of $1,300 an ounce, while Washington’s imposed sanctions on China's Huawei telecom giant failed to provide haven demand on bullions.

Spot gold slipped for a third straight session on Thursday to $1294.75 an ounce, where prices resumed its plummet after hitting a peak of $1303.32 on Tuesday.

Investors continued to damp demand on gold today, despite the drop in global equities, after it failed to hold above the psychological level of $1300.

Asian and European stocks fell after the United States imposed restriction on Huawei disallowing it from buying components from US companies.

The U.S. blacklist to Huawei is considered another blow to the trade dispute between the U.S. and China, thereby threatening further escalation.

Commerce ministry spokesman Gao Feng described America's restriction to Huawei from buying components from US companies as a "tool for trade protectionism," and warned that China will defend "the legitimate rights of Chinese firms."

Feng has also denied that his President would meet with Donald Trump to resolve the trade dilemma.

As of 12:15, the US dollar index, which measures the greenback against six major currencies, subtracted 0.01 percent to 97.363.

For other precious metals, silver dropped 0.04 percent to $14.796 an ounce, while palladium fell 0.16 percent to $1330.50 an ounce. Platinum slipped 0.01 percent to $847.40 after it touched the lowest level in seven weeks at $837.75.

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