Gold steady as strong dollar counters concerns over US-China trade spat
Spot gold was holding at $1,279.30 per ounce at 0734 GMT. The metal touched its weakest since late December at $1,275.01 an ounce on Friday. US gold futures for August delivery were up 0.3 percent at $1,281.70 per ounce.
Gold prices were mostly steady on Monday, holding near a 5-1/2-month low touched in the previous session, as a stronger dollar offset support from an ongoing trade dispute between the world`s two largest economies.
Spot gold was holding at $1,279.30 per ounce at 0734 GMT. The metal touched its weakest since late December at $1,275.01 an ounce on Friday.
US gold futures for August delivery were up 0.3 percent at $1,281.70 per ounce.
"The US dollar strength is weighing on investor sentiment at the moment rather than any concerns about weaker economic growth due to the trade tensions," said ANZ analyst Daniel Hynes.
The dollar index, which measures the greenback against a basket of six major currencies, edged up 0.2 percent to 94.985, hovering close to a seven-month high touched in the previous session.
US President Donald Trump on Friday said he was pushing ahead with hefty tariffs on $50 billion of Chinese imports, and the smouldering trade war between the world`s two largest economies showed signs of igniting as Beijing immediately vowed to respond in kind.
Gold is often used by investors as a hedge against political and financial uncertainty.
"Risk appetite will likely stay weak into the trading day ahead following intensified trade concerns," OCBC said in a note.
Meanwhile, Asian shares fell to a 2-1/2-week low on Monday after Trump cranked up the trade tensions with China.
South Korea and the United States are expected to announce the suspension of "large-scale" military drills this week, with the provision that they would restart if North Korea failed to keep its promise to denuclearise, news agency Yonhap said on Sunday.
Spot gold may break support at $1,277 per ounce and fall more towards the range of $1,258-$1,268, Reuters technical analyst Wang Tao said.
Hedge funds and money managers raised their net long position in COMEX gold by 6,506 contracts to 64,572 contracts in the week to June 12, US data showed on Friday. This was the highest net long position in gold since late April.
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Speculators also raised their net long position in silver to the strongest in 6-1/2 months.
Meanwhile, silver was up 0.1 percent at $16.53 per ounce.
Platinum fell 0.6 percent to $881.74 an ounce, after touching its lowest since May 21 earlier in the session.
Palladium was 0.3-percent lower at $983.50 an ounce. It hit a near two-week low during the session.
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