Mubasher: Gold prices declined on Monday as the dollar firmed following a report suggesting China’s hesitation to pursue to a broad deal with the US, according to Reuters.
However, the yellow metal maintained a tight range, as investors remained in a wait-and-see mode ahead of a fresh round of trade talks between Washington and Beijing this week.
By 11:18 am GMT, spot gold fell by 0.32% to $1,499.87 per ounce, while US gold futures dropped by 0.50% to $1,505.30 per ounce.
Officials from the world’s two biggest economies are scheduled to meet on 10 and 11 October in Washington, despite latest reports pointing that China could be looking to limit the scope of any resulting deal.
While “gold seems to have run out of steam here, [needing] a trigger for the market to move, […] the fact that the dollar is a tad higher is the reason gold is a bit softer,” Saxo Bank commodity strategist Ole Hansen was quoted by Reuters.
The US dollar returned to strength after four consecutive sessions of losses last week.
The dollar index, a tracker of the US currency against six major peers, nudged up by 0.02% to 98.8250.
It is worth pointing out that the higher the dollar gets, the costlier greenback-denominated bullion becomes and the more demand weakens among non-US currency holders.
“Gold is holding on to what it knows best and right now it knows the $1,500 level quite well,” Hansen said.
Curbing gold’s declines was the US jobs report on Friday, showing slower hiring growth in September and stalling wage increase, even with the unemployment rate hitting a 50-year low.
Moreover, European stocks fell after figures showed a decline in German factory orders during August, underpinning worries that a manufacturing slump could push Europe’s economic locomotive towards a technical recession.
This week will be a tad wait-and-see week, with the US Federal Open Market Committee’s minutes from its September meeting on Wednesday as well as the scheduled trade talks, Hansen noted.