MCX Gold settled down 0.28% at 38971 on profit booking after prices gained as the dollar dipped and U.S. military strikes in the Middle East drove investors towards the safe-haven metal.
The U.S. military carried out successful air strikes in Iraq and Syria against an Iran-backed militia group, spurring market uncertainty and geopolitical tensions. Gold prices have risen nearly 18% this year and were on track for its best year since 2010, mainly due to the 17-month-long Sino-U.S. tariff war and its impact on global economic growth.
Indicative of investor sentiment, holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust , rose 0.1% to 893.25 tonnes on Friday, the highest since Nov. 29.Gold prices flipped to a premium this week in India due to limited supplies even as demand remained subdued, while other Asian regions barely saw any holiday purchasing. Indian dealers were charging a premium of up to $1 an ounce over official domestic prices this week, compared to a discount of $2.5 an ounce last week.
On the trade front, China’s Commerce Ministry on Sunday said it has “proactively dealt with” trade frictions with U.S. this year. Market participants, however, remained wary even after Washington and Beijing have made progress in their tariff dispute and an official ratification of an initial trade deal was close.
