Gold prices were barely changed on Monday, June 4 , buoyed by a wilting dollar as Italian political risk receded, though the prospect of another rise in U.S. interest rates capped gains.
Spot gold was flat at $1,292.90 per ounce by 1:34 p.m. EDT (1734 GMT), while U.S. gold futures for August
delivery settled down $2, or 0.2 percent, at $1,297.30.
The metal fell on Friday after stronger-than-expected U.S. payrolls data shored up expectations that the U.S. Federal Reserve would press ahead with another rate hike at its June meeting.
Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion.
They also boost the dollar, in which the metal is priced. The euro eroded some of last month’s hefty losses to bounce 0.5 percent against the dollar as Italy’s political tensions eased.
Equities also strengthened as worries over a potential trade war between the United States and other major economies were overshadowed by a retreat in political risk in Europe and strong U.S. jobs data.
Finance leaders of the closest U.S. allies vented anger over the Trump administration’s metal import tariffs. Gold has struggled to capitalize on the trade stand-off, however, as attention turned to the outlook for U.S. interest rates.
Speculators raised their net long position in COMEX gold contracts to the strongest level since late April in the week to May 29, the U.S. Commodity Futures Trading Commission said.
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However, gold-backed exchange-traded funds registered outflows later in the week, suffering the biggest one-day outflow in nearly four months, suggesting that investment appetite was softening.
Meanwhile, silver increased 0.1 percent to $16.37 an ounce, while platinum was trading down 0.2 percent at $897.25 after earlier hitting a 10-day low of $894.55.
Palladium lost 0.5 percent to $994.47 per ounce, after earlier seeing $1,010.50, a three-week high.
Money manager short positions, or bets on falling prices, on CME platinum contracts hit record highs in the week to last Tuesday, ING said in a note.
