Gold eases, but still heading for fourth monthly gain

Gold eased on Friday as equity markets and the dollar firmed, but fears of a global economic slowdown and uncertainty about the U.S.-China trade war kept the safe-haven metal on track for its fourth straight monthly rise.

Spot gold was down 0.1% to $1,525.97 per ounce. However, bullion has gained nearly 8% so this month, heading for a fourth consecutive monthly gain. U.S. gold futures were down 0.1% at $1,535.20 an ounce.

“The trade war rhetoric has been toned down somewhat, which has lifted stocks and bond yields, and attracted some profit taking in gold,” Saxo Bank commodity strategist Ole Hansen said, adding a stronger dollar was also pressuring gold.

“However, even though we may see an improvement on the trade front, which is doubtful, economic activity is still slowing down; that cannot turn around overnight. So, the underlying support from lower bond yields is still there.”

Weighing on gold’s appeal, the dollar index hit a one-month high en route to its best week in two months.

Global stock markets rose after the United States and China showed a willingness to resolve their trade dispute by returning to the negotiating table.

China’s commerce ministry also said a September round of meetings was being discussed by the two sides, but added it was important for Washington to cancel a tariff increase.

“Gold will have a very high beta to any reduction in trade tensions given that they have driven so much of its rally,” OANDA analyst Jeffrey Halley wrote in a note.

Gold prices have risen more than $100 so far this month, mainly driven by the trade war between the world’s biggest economics and heightened fears over a global downturn.

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Resource Commodities

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Silver 17.36 3.97%
Copper 2.68 2.681
Platinum 901.00 0.67%
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Uranium 25.05 0.00%