Gold bars on display. Picture: BLOOMBERG
Gold bars on display. Picture: BLOOMBERG

Bengaluru — Gold retreated from a 14-month peak on Monday after an agreement late last week between the US and Mexico to avert a tariff war crimped safe-haven demand for the metal.

Spot gold had fallen 0.5% to $1,333.44 per ounce by 1.03am GMT (3.03am SA time).

In the previous session, the metal hit its highest since April 19, 2018 at $1,348.08 an ounce.

US gold futures were 0.5% lower at $1339.90 an ounce.

The US and Mexico struck a deal on Friday to avert a tariff war, with Mexico agreeing to rapidly expand a controversial asylum programme and deploy security forces to stem the flow of illegal Central American migrants.

US President Donald Trump defended the deal with Mexico against criticism that there were no major new commitments to stem a flow of Central American migrants crossing into the US, and said on Sunday more details will soon be released.

US stock futures jumped, drawing optimism from the agreement, while being further supported by bets of a US interest rate cut after Friday’s soft payroll data.

The US dollar also rose 0.2% against the safe-haven yen having been pressured most of last week by increasing bets of a US interest rate cut.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.15% to 756.42 tons on Friday from 757.59 tons on Thursday.

The value of China’s gold reserves rose to $79.83bn in May from $78.35bn at end-April, central bank data showed on Monday.

Gold prices in India flipped into discounts last week as a rally in local prices dampened demand, while premiums in other major Asian hubs declined as a price surge prompted investors to sell back bullion.

China is preparing to curb some technology exports to the US, the chief editor of China’s Global Times newspaper said on Saturday, thawing hopes of a Mexico-like settlement in a trade war between the two countries.