Gold steady as investors await fresh move in US, China trade spat

Gold prices were little changed on Monday as investors awaited fresh developments on the simmering trade spat between the United States and China.

Spot gold was almost unchanged at $1,332.46 an ounce as of 0330 GMT. Prices hit a more than two-week low of $1,321.16 an ounce on Friday before closing 0.5 percent higher.

US gold futures were unchanged at $1,335.80 an ounce.

“We’ve had certain comments from the US about trade conflict over the last week and the weekend. The market is being dismissive about those issues until they see any real impact on the ground,” said ANZ analyst Daniel Hynes.

US President Donald Trump predicted on Sunday that China would take down its trade barriers, expressing optimism despite escalating trade tensions between the world’s two largest economies that have roiled global markets in the past week.

Trump late on Thursday threatened to slap $100 billion more in tariffs on Chinese imports, while Beijing said it was fully prepared to respond with a “fierce counter strike”.

“We do hold a relatively bullish view in the next 2-3 months and we would certainly expect prices to push above $1,350 in that time frame,” said Hynes.

Meanwhile, easing tensions between the United States and North Korea dampened the appeal of gold, which is often used as a store of value during times of financial or political uncertainty.

North Korea has told the United States for the first time that it is prepared to discuss the denuclearization of the Korean Peninsula when North Korean leader Kim Jong Un meets President Donald Trump, a US official said on Sunday.

The dollar nursed its losses on Monday, having retreated late last week due to concerns over US-China trade tensions and following data that showed the U.S. economy created the fewest jobs in six months in March.

However, a pickup in wage gains pointed to a tightening labour market, which should allow the Federal Reserve to raise interest rates further this year.

Higher interest rates discourage the buying of non-interest-paying bullion, which is priced in dollars.

Hedge funds and money managers slashed their net long position in COMEX gold in the week to April 3 and boosted their net short position in silver to a record, US Commodity Futures Trading Commission data showed on Friday.

Spot silver was up 0.3 per cent at $16.39 per ounce and platinum climbed nearly 1 per cent to $921.20 per ounce.

Palladium rose 0.5 per cent to $905.25 an ounce after dropping to $895.47 on Friday, its lowest since mid-August 2017.