Gold slips ahead of more US-China trade talks
‘The fact that the dollar is a tad higher is the reason gold is a bit softer,’ Saxo Bank commodity strategist Ole Hansen said
Bengaluru — Gold prices eased on Monday as the dollar firmed after a report said China was reluctant to agree to a broad trade deal with Washington, but bullion held a tight range as investors took a wait-and-see approach ahead of US-China talks this week.
Spot gold was down 0.3 % at $1,499.79/oz at 11.29am GMT. Prices firmed 0.5% last week on concerns of slowing global growth. US gold futures slipped 0.5% to $1,505.30/oz.
The US and China are set to meet for trade negotiations in Washington on October 10-11, although latest news reports suggest Beijing may be looking to restrict the scope of any deal.
“Gold seems to have run out of steam here, we just need 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 said.
“Gold is holding on to what it knows best and right now it knows the $1,500 level quite well. It's going to be a little bit of a wait-and-see week, with the US Federal Reserve minutes and the trade talks due this week.”
The federal open market committee's minutes from its September meeting are due on Wednesday.
The dollar edged up against rivals after four straight days of losses last week, with China's offshore yuan and the euro both pressured.
A higher US currency makes dollar-denominated gold more expensive for holders of other currencies, which could subdue demand.
However, limiting gold's downside, European shares dipped as a fall in German industrial orders underscored concerns about a looming recession in Europe's largest economy.
Meanwhile, data out of the US on Friday showed jobs growth slowed in September and wage growth stalled, even as unemployment dropped to a 50-year low.
But that did little to change market expectations that the US Federal Reserve is likely to cut interest rates at its next policy review on October 29-30 to support the economy.
“Gold continues to get appraised against the US bond yields and what the Federal Reserve is going to do next,” said AxiTrader market strategist Stephen Innes in a note.
“So, while price action seems supportive enough to suggest a long bias remains intact ... market participants likely need further evidence from the Fed board that they are shifting to an easing bias to push prices significantly higher.”
Elsewhere, platinum was down 0.1% to $877.18/oz, silver dipped 0.6% to $17.45 and palladium fell 0.3% to $1,660.29.
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