Selling puts gold under pressure

London — Gold prices ticked lower on Monday under pressure from selling by investors as well as a firmer dollar and another escalation in the trade conflict between China and the US.

Spot gold was down 0.2% at $1,211.16/oz by 9.41am GMT after climbing as high as $1217.85 in early trade.

US gold futures dipped 0.3% at $1,219.50/oz.

“Overall the bears remain in control and they continue to increase their short positions — both the net and gross are hitting records,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

Hedge funds and money managers added a hefty 13,931 contracts to their net short position in the week to July 31, bringing it to 41,087 contracts, the biggest since records became publicly available in 2006, data showed on Friday.

Gold has been in a downtrend since touching a peak of $1,365.23 on April 11. It has shed more than 11% and hit a 17-month low on Friday.

“We bounced off the $1,205 level on Friday and that is just a red flag to the bears right now. They are taking aim at that level and gold is likely to struggle unless we see a clear change in the view on the dollar,” Hansen said.