Gold steadies as Trump's tariff threat supports dollar
Gold was little changed on Monday as the dollar gained after U.S. President Donald Trump threatened to raise tariffs on Chinese goods, escalating Sino-U.S. trade tensions and prompting investors to sell riskier assets.
Spot gold was down 0.1 percent at $1,277.66 per ounce, as of 1324 GMT. U.S. gold futures were down 0.1 percent to $1,279.80 an ounce.
U.S. President Donald Trump on Sunday said he would raise tariffs on $200 billion worth of Chinese goods this week. He also said he would target a further $325 billion of Chinese goods with 25 percent tariffs "shortly", essentially covering all products imported into the United States from China.
"We are seeing the markets reacting to uncertainty about trade talks. It is creating some nervousness in the markets. The dollar is a tad stronger, countering some of the potential moves we would have seen otherwise in gold," said Ole Hansen, commodity strategist at Saxo Bank.
The dollar, which was the preferred safe-haven from U.S.-China trade tensions since last year, was up 0.1 percent.
Gold had earlier hit a near one-week peak of $1,285.51 an ounce as Trump`s comments dented global shares and oil prices.
"Despite the increase in gold prices, technical analysis suggests that downward pressure on the yellow metal continues to manifest," OCBC analysts said in a research note, adding that most of the intra-day move was likely related to covering short positions and hedging against market risks.
"The medium term still suggests a large range-bound consolidation of $1,270 to $1,300."
Last week, the mood among gold investors had turned gloomy, pushing the metal to a four-month low after the U.S. Federal Reserve Chairman Jerome Powell dashed hopes of a rate cut this year.
Hedge funds and money managers switched to a net long position in COMEX gold in the week to April 30, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
"The hedge fund community is extremely confused, flipping long and short positions. $1,290 is the key level for gold, and if prices break above that we could see quite an addition on the long side," Hansen said.
Meanwhile, holdings of SPDR Gold Trust, the world`s largest gold backed exchange, were at their lowest since Oct. 11. Holdings fell 0.6 percent on Friday.
However, physical demand for the metal had been robust last week with India and Singapore leveraging the correction in prices ahead of a key gold-buying festival.
Silver slipped 1 percent to $14.78 per ounce, while platinum fell 1.2 percent to $858.25 per ounce.
Palladium dropped 1.6 percent to $1,348.51 an ounce.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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