US gold futures prices inched lower on Monday as investors sought more clarity on US-China trade talks, while escalating tensions in the Middle East provided some support.
Spot gold fell 0.2 per cent to $1,514.44 per ounce at 0546 GMT, but lingered near the over one-week high of $1,516.81 hit on Friday.
US gold futures were up 0.5 per cent to $1,521.90 per ounce.
“Gold is currently in a mixed zone.” said Howie Lee, economist at OCBC Bank.
“The pickup in geopolitical risk from Saudi Arabia and President Trump rejecting the possibility of a partial trade deal with China certainly adds that little more shine to gold.”
A US-China trade breakthrough seemed unlikely after President Donald Trump told reporters on Friday he was “not looking” for a partial deal, and Chinese officials cancelled goodwill visits to US farmers.
But both sides later published positive statements, with the US Trade Representative’s office describing the last week’s talks as “productive” and China’s Commerce Ministry calling them “constructive.” October’s high-level talks remain on track.
Meanwhile in the Middle East, tensions remained elevated with the Pentagon ordering additional troops to be deployed in the Gulf region to strengthen Saudi Arabia’s air and missile defences, following an attack on the kingdom’s oil facilities. US has slapped more sanctions on Iran, penalising the Iranian Central Bank.
Saudi Arabia will also seek to make a case at a global gathering in New York this week for concerted action to punish and deter Iran after the strikes.
“The safe heaven status is still supporting gold. But the prices are stuck between $1,480 and $1,580,” said OANDA analyst Jeffrey Halley.
The dollar was nearly flat against a basket of currencies , while most Asian share markets slipped on Monday.
Indicative of investor interest in gold, holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 1.19 per cent to 894.15 tonnes on Friday.
Meanwhile, COMEX gold speculators raise net long position by 14,150 contracts to 261,878 in week to Sept. 17, according to the US Commodity Futures Trading Commission data.
Spot palladium rose about 1 per cent to $1,656.77 per ounce, after hitting a record high at $1,659.27 earlier in the session.
Silver rose 1.6 per cent to $18.26 per ounce and platinum rose nearly 1 per cent to $953.70 per ounce.
