Picture: 123RF/KTS DESIGN
Picture: 123RF/KTS DESIGN

Bengaluru — Gold was little changed on Friday, but still on track to post its biggest monthly decline in three years, as investors sought clarity on the US-China trade developments after US backed anti-government protesters in Hong Kong.

Spot gold fell 0.1 % to $1,456.37 an ounce as of 11.01am GMT, while US gold futures edged 0.2% higher to $1,455.70.

“Gold is trading sideways awaiting clarity on how the Chinese will react to the latest developments on the China-US trade deal. At the moment, a risk-off environment is providing moderate support for gold,” said UBS commodity analyst Giovanni Staunovo.

Investors were uncertain about the fate of a phase-one trade deal between the two economies, after Beijing warned the US on Thursday it would take “firm counter-measures” in response to US legislation backing anti-government protesters in Hong Kong.

This weighed on risk assets, with European shares down for a second session, and provided support to safe-haven gold. “I am surprised that gold has managed to hold above $1,450 since there is some bargain hunting. This is a good entry level for the ones who missed out previously,” Staunovo said.

Gold was, however, down about 3.7% for the month so far, which could be its biggest monthly decline since November 2016. Investors are scaling back rate-cut bets after robust US economic growth data on Wednesday set gold on a likely path to end the week lower for a second straight week.

“The market is pricing in a reduced probability of a rate cut at the December Federal Open Market Committee meeting,” Suki Cooper, precious metals analyst at Standard Chartered Bank, said via e-mail. “We expect the US Federal Reserve to remain on hold in December and throughout 2020 as long as growth is close to trend and risks of external shocks are moderate.”

Inflation rose to an annual rate of 1.0% in the eurozone in November, according to a first estimate from the EU’s statistics agency, in the midst of fears of a slowdown in the global economy.

Among other precious metals, silver was up 0.3% to $16.92 an ounce, and platinum dropped 0.5% to $897.20, despite being on track to extend gains for a third week. Palladium eased 0.3% to $1,835.69 an ounce, and has gained about 3.5% so far this week. The metal, used largely in the making of catalytic converters, hit a record peak of $1,844.50 earlier in the session.

Reuters