Gold inches higher as attention turns to China-US talks
Bengaluru — Gold prices edged higher on Monday as investors were cautious ahead of this week’s Sino-US trade talks after a report that Beijing would likely disagree to a broad trade deal with the US.
Spot gold gained 0.1% to $1,505.86 per ounce as of 6.24am. Prices had firmed 0.5% last week on fears of cooling global growth.
US gold futures were little changed at $1,513.30 per ounce.
There is uncertainty regarding the trade negotiations. China seems to be very reluctant to agree, said Margaret Yang Yan, a market analyst at CMC Markets.
“There is demand for safe haven assets, which reflects a very cautious mood towards the trade deal,” Yan said.
The next round of US-China trade negotiations are slated to be held in Washington on October 10-11, though hopes of progress diminished after Bloomberg reported that Chinese officials wanted the scope of this week’s negotiations to be narrow.
“Gold has been in a range of less than $100. It will take a strong catalyst to bring gold out of this channel,” Yan said, adding that quantitative easing by the Fed, European Central Bank and Bank of Japan could be a major factor.
A report on Friday showed jobs growth in the US 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 Fed will cut likely interest rates at its next policy review on October 29-30 to support the economy. Lower interest rates reduce the opportunity cost of holding non-yielding gold.
Meanwhile, China’s foreign exchange reserves fell more than expected in September amid a cooling domestic economy and the rising trade tensions.
Among other metals, platinum rose 0.3% to $878.75, silver dipped 0.1% to $17.53 and palladium dropped slightly to $1,663.69.
Reuters
Source: businesslive.co.za