Gold inches higher on bargain-hunting

Bengaluru — Gold inched up on Monday as bargain-hunters bought the metal after prices dipped in the previous session, amid reports that the US is set to impose a new round of tariffs on Chinese imports.

Spot gold was up 0.2% at $1,195.27/oz as of 3.54am GMT, after falling 0.6% on Friday when it marked its third consecutive weekly decline.

US gold futures were down 0.1% at $1,199.80.

US President Donald Trump is likely to announce new tariffs on about $200bn on Chinese imports as early as Monday, a senior administration official told Reuters.

“The price action shows that the influence of the news coming out on tariffs is waning a little bit,” said Ji Ming, chief analyst at Shandong Gold Group.

“We even see gold rising rapidly towards $1,230-$1,240 levels once the impact of the trade war is clearer.… It looks like a relatively good opportunity to buy gold at the current levels.”

Gold prices have declined about 12.6% from April amid intensifying global trade tensions and under pressure from rising US interest rates.

Although gold is generally presumed to be a safe-haven asset, the months-long trade rift between Washington and Beijing has prompted investors to opt for the US dollar in the belief that the US has less to lose from the dispute.

The dollar index was steady at 94.951, having bounced from more than six-week lows of 94.359 hit last week.

“We have to suspect that the dollar will regain upside momentum, especially if the trade environment takes a turn for the worst just ahead of the Fed’s month-end meeting,” INTL FCStone analyst Edward Meir said in a note.

“Although investors are expecting yet another quarter-point rate increase, the concern is that a change in policy wording could make a more definitive case for future rate hikes,” he said. In such an environment, gold will have trouble moving higher and could instead start another leg down, he said.

Meanwhile, investors trimmed their net short position in Comex gold and silver in the week to September 11, a US data showed.

Spot gold may retest a support at $1,193/oz, after bouncing moderately into a range of $1,197-$1,200, said Reuters technical analyst Wang Tao.

Among other precious metals, spot silver was up 0.3% at $14.08.

Platinum rose 0.3% to $793.90, while palladium rose 0.1% to $978.50.

Reuters