• Gold inched up on Monday as investors looked for short-term gains using the metal’s recent narrow trading range, amid increasing Sino-U.S. trade tensions and prospects of further interest rate hikes by the U.S. Federal Reserve.
Spot gold was up 0.2 percent at $1,195.83 an ounce as of 0655 GMT, after falling 0.6 percent on Friday when it marked its third straight weekly decline.
U.S. gold futures were down 0.1 percent at $1,199.80.
• “It is a range-buying trade as people watch for moves in the dollar and developments in U.S.-China tariffs dispute,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
• Gold has held a $25 range for the past few weeks and could hold that till the markets get a specific direction on rate hikes for this year in the upcoming September Fed meeting, he added.
• Markets are nervously awaiting Washington’s announcement of a new round of tariffs on Chinese imports, setting the stage for possible reprisals by Beijing.
• “The price action (in gold) shows that the influence of the news coming out on tariffs is waning a little bit,” said Ji Ming, chief analyst at Shandong Gold Group.
• “We even see gold rising rapidly towards $1,230-$1,240 levels once the impact of the trade war is clearer ... It looks like a relatively good opportunity to buy gold at the current levels.”
• Gold prices have declined about 12.6 percent from April amid intensifying global trade tensions and under pressure from rising U.S. interest rates.
• Though gold is generally presumed to be a safe-haven asset, the months-long trade rift between Washington and Beijing has prompted investors to opt for the U.S. dollar in the belief that the United States has less to lose from the dispute.
• The dollar index was steady at 94.915, having bounced from over six-week lows of 94.359 hit last week.
• “We have to suspect that the dollar will regain upside momentum, especially if the trade environment takes a turn for the worst just ahead of the Fed’s month-end meeting,” INTL FCStone analyst Edward Meir said in a note.
• “Although investors are expecting yet another quarter-point rate increase, the concern is that a change in policy wording could make a more definitive case for future rate hikes.”
• Meanwhile, investors trimmed their net short position in Comex gold and silver in the week to Sept. 11, a U.S. data showed.
• Spot gold may retest a support at $1,193 per ounce, after bouncing moderately into a range of $1,197-$1,200, according to Reuters technical analyst Wang Tao.
• Among other precious metals, spot silver was up 0.3 percent at $14.08.
• Platinum rose 0.3 percent to $793.90, while palladium rose 0.1 percent to $978.50.
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• Wall Street and Main Street both look for gold to build on its gains next week, based on the weekly Kitco News gold survey.
Comex December gold hit a two-week high of $1,218 an ounce on Thursday. Commerzbank cited several factors – a slightly softer-than forecast U.S. inflation report, a European Central Bank deemed somewhat “cautious” in unwinding loose monetary policy, and a rate hike in Turkey that boosted the country’s currency and thus made gold less expensive for its citizens.
Seventeen market professionals took part in the Wall Street survey. Ten respondents, or 59%, predicted higher prices. There was just one vote, or 6%, calling for lower prices, while six respondents, or 35%, were neutral or looked for a sideways market.
Meanwhile, 485 people responded to an online poll. A total of 250 respondents, or 52%, called for gold to rise. Another 158, or 33%, predicted gold would fall. The remaining 77, or 16%, see a sideways market.
For the trading week now winding down, 41% of Wall Street voters and 49% of Main Street respondents were bullish. Around 11 a.m. EDT, Comex December gold was up 0.3% for the week so far to $1,203.70 an ounce.
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