Gold prices edged up on Monday as the dollar weakened while trade concerns between the U.S. and China also supported the bullion.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange gained 0.2 percent to $1273.60 a troy ounce by 11:30 pm ET.
The precious metal edged lower at the start of a new trading week, though has managed to recover early lost ground and is currently holding in the neutral territory around the $1270 region.
In other precious metal trade, silver futures fell 0.54 percent to $16.370 a troy ounce, while platinum gained 0.35 percent at $878.10 an ounce.
Chinese Investment, U.S. Tariffs
The U.S. is considering to declare China’s investment in U.S. technologies companies a threat to economic and national security, according to reports on Monday that cited eight people familiar with the plans.
The reports further noted U.S. Treasury Secretary Steven Mnuchin would suggest administering the law in a report scheduled to be released on June 29.
On Friday, U.S. President Donald Trump threatened to impose a 20% tariff on all U.S. imports of European Union-assembled cars, escalating trade tensions with Europe.
In response, a senior European Commission official said the EU would respond to any U.S. move to raise tariffs on cars made in the bloc.
The risk-off mood was evident from the ongoing slide in the US Treasury bond yields, which remained supportive of a modest uptick witnessed around the non-yielding yellow metal.
Meanwhile, the U.S. Dollar Index, which measures the greenback against a basket of six major currencies, fell in morning trade and was trading at 94.4960.
The greenback has been strengthening since April but the looming trade war is starting to create jitters on the market.
Dollar-denominated assets such as gold are sensitive to moves in the dollar – A fall in the dollar makes gold less expensive for holders of foreign currency and thus, increases demand for the precious metal.
Moreover, a goodish pickup in the U.S. dollar demand was seen as one of the key factors exerting some fresh downward pressure on dollar-denominated commodities – like gold.
After an initial uptick, the metal came under some renewed selling pressure and touched an intraday low near the $1265 region.
However, global trade war tensions, leading to a fresh wave of global risk-off trade, as depicted by weaker sentiment around equity markets, underpinned the precious metal’s safe-haven appeal and helped limit further downside.
BWorldFinance is your primary source of news in the financial market, technology, and more. Visit bworldfinance.com now and get the latest happenings in the market. Register an account now and begin your investing journey!