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Gold slips as dollar bounces on global trade jitters


By Verma

(Reuters) - Gold prices edged lower on Monday as investors preferred the safety of the dollar in the face of mounting concerns that the U.S.-trade dispute could slow global growth.

Spot gold dropped 0.4 percent to $1,309.05 per ounce at 12:31 p.m. EST (1731 GMT).

gold futures declined 0.4 percent to $1,313.1 per ounce.

"The big factor here is the strengthening of the dollar," which is being supported by the trade dispute, said Bart Melek, at in

"Any sort of a lack of agreement between the and weakens the global emerging market currencies and that means, in relative terms, the dollar does better, which is negative for gold," he said.

Trade talks between and are set to resume this week with a delegation of U.S. officials traveling to for the next round of negotiations.

But U.S. last week said he did not plan to meet with China's before the March 1 deadline, dampening hopes that a trade pact might be reached quickly.

The dollar index was at its highest in nearly seven weeks, which could dent demand for the amongst holders of other currencies.

"Gains in U.S. and world stock markets are also a bearish element for the safe-haven metals," Jim Wyckoff, at Kitco Metals, wrote in a note to clients.

Gold could be vulnerable to more corrections if the dollar strengthens further, analysts said.

"With U.S. employment numbers still quite strong and people moving into dollar for safe haven purposes, there is really no good reason why gold should take off much higher," TD's Melek said.

But the yellow held above the key $1,300-per-ounce level, supported by uncertainties surrounding the U.S. Federal Reserve's monetary policy and the possibility of another shutdown, analyts said.

Gold prices should remain rangebound until there is clarity on the trade front and a government shutdown, said in a research note.

Among other precious metals, platinum fell 1.7 percent to $784.25 per ounce, after touching its lowest in three weeks at $782.60.

"The spot price of platinum breaking through the $800 level has forced some hedge funds to head for the exit," Walter Pehowich, of at Dillon Gage Metals, said in a note.

"With a lack of any good to support a rally in this market, I expect the sell off to continue."

Palladium slid 1.1 percent to $1,386.02 after rising to its highest in since Jan. 18 at $1,404.50 earlier in the session.

Silver fell 0.7 percent to $15.71 an ounce.

(Reporting by Verma, and in Bengaluru; editing by G Crosse and David Gregorio)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, February 11 2019. 23:15 IST