Mubasher: Gold retreated from its 14-month high hit in the preceding session after the US and Mexico inked a deal, avoiding a tariff war and thus dampening safe-haven demand, according to Reuters.
By 10:06 am GMT, spot gold declined by 0.87% to $1,329.17 per ounce, after hitting $1,348.08 per ounce, the highest level recorded since 19 April last year, while US gold futures dropped by 1.02% to $1,332.40 per ounce.
“Talks between the US and Mexico seem to have smoothened out already and the market seems to have lost its safe-haven appeal a little bit,” Hong Kong-based Lee Cheong Gold Dealers chief dealer Ronald Leung was quoted by Reuters.
President Donald Trump promised more details on the agreement to be announced amid criticism that no new landmark commitments to curb the flow of Central American migrants crossing illegally to the US.
That said, a positive glimpse was provided on hopes that the US Federal Reserve might cut interest rates, raising hopes for gold bulls, with Friday’s soft US jobs data adding further signs to an economic downturn.
Lower interest rates would mean higher opportunity cost for holding the non-yielding bullion.
In addition, China’s politically sensitive trade surplus with the US expanded to $26.89 billion last May.