Gold prices traded lower as a stronger dollar continued to weigh on the precious metal, with investors showing a preference for the greenback as a safe-haven asset.
At 10:48 AM ET (10:48 GMT), gold futures for December delivery on the Comex division of the New York Mercantile Exchange traded down $4.50, or 0.37%, to $1,218.70 a troy ounce. That was still higher than last Friday’s $1,205.10, its lowest level since March 2017.
Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, gained 0.15% to 95.17, pushing back towards a more-than-one-year high of 95.44 reached in mid-July.
A stronger greenback makes the dollar-denominated metal more affordable for holders of other currencies.
Higher interest rates tend to weigh on demand for gold, which doesn’t bear interest, in favor of yield-bearing investments.
Amid the escalating trade tensions between the U.S. and China, investors are showing a preference for the greenback over gold as a safe-haven asset.
Chinese state media on Monday attacked U.S. President Donald Trump‘s trade policies, stating that he was starring in his own “street fighter-style deceitful drama of extortion and intimidation”.
Chinese authorities announced last Friday that it would impose tariffs, ranging from 5% to 35%, on $60 billion in U.S. goods that include many agriculture-related goods if the U.S. proceeded with placing more tariffs on Chinese imports.
Economic Council Director Larry Kudlow said in an interview with Bloomberg over the weekend that Trump would keep adding pressure to China.
“We’ve said many times: no tariffs, no tariff barriers, no subsidies. We want to see trade reforms. China is not delivering, okay?” Kudlow said on Friday. “Their economy’s weak, their currency is weak, people are leaving the country. Don’t underestimate President Trump’s determination to follow through.”
In other metals trading, silver futures fell 0.79% at $15.340 a troy ounce by 10:51 AM ET (10:51 GMT).
While sister metal platinum slumped 1.39% at $825.30, Palladium futures lost 0.80% to $900.60 an ounce.
In base metals, copper traded down 1.03% to $2.735 a pound./investing.com