Gold eases as dollar extends rally; U.S.-China ties in focus

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August 10, 2020

Gold prices edged lower on Monday and retreated sharply from a record peak in the last session, as the dollar made further gains with investors keeping a cautious eye on the U.S.-China spat ahead of key trade talks on Aug. 15.

Spot gold fell 0.2% to $2,031.39 per ounce by 1225 GMT. U.S. gold futures rose 0.7% to $2,041.60 per ounce.

Gold hit a record high of $2,072.50 on Friday but pulled back as much as 2.5%, hurt by a bounce in the dollar after data showed the U.S. economy added 1.763 million jobs in July.

“We’re seeing a little bit of a top (in gold) in the short to medium term and because of the rebound of the dollar, we could see a little bit of a drift lower over the course of the next few days” said Michael Hewson, chief market analyst at CMC Markets UK.

While gold could decline further towards $2,000 or lower as investors book profits, bullion hasn’t lost its lustre, he added.

The dollar has at times been the favoured refuge amid escalations between Washington and Beijing, and hit a near-one week high earlier in the day, with investors also focusing on fiscal stimulus in the U.S. ahead of trade talks on Aug. 15.

Escalating tensions with the United States, China said it would impose sanctions against U.S. officials, after Washington imposed sanctions on Hong Kong and Chinese officials on Friday.

Unprecedented global stimulus packages due to the COVID-19 pandemic have buoyed gold’s appeal as a hedge against inflation and currency debasement, driving it 34% higher so far this year.

“As long as the price remains above $2,000, the bullish momentum can continue, as the hunger for gold is still at its peak,” ActivTrades chief analyst Carlo Alberto De Casa said in a note.

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Silver rose 0.3% to $28.37 per ounce, platinum gained 2% to $981.12 per ounce, and palladium was also up 0.7% at $2,191.90 per ounce.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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Gold eases as dollar extends rally; U.S.-China ties in focus

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