Gold prices edged lower on Monday, June 25, weighed down by a strong U.S. dollar amid prospects of
higher interest rates, while global trade tensions kept the metal buoyed above a six-month low hit last week.
Spot gold was down 0.3 percent at $1,264.70 an ounce as of 0624 GMT. U.S. gold futures for August delivery were 0.3 percent lower at $1,266.60 per ounce.
“There are specific factors that will actually push the dollar higher, given the trade tensions as well as the booming U.S. economy versus other economies,” said OCBC analyst Barnabas Gan.
“Gold prices are very much influenced by the dollar movement rather than anything else. It’s less of a safe-haven demand into gold but rather a reaction to USD strength.”
U.S. President Donald Trump on Friday threatened to escalate a trade war with Europe by imposing a 20 percent tariff on all imports of European Union-assembled cars.
Trump also plans to bar many Chinese companies from investing in U.S. technology firms and block additional technology exports to Beijing, Wall Street Journal reported on Sunday.
Gold usually gains from political and economic tensions, but has struggled this time around as the dollar has risen strongly, making the dollar-priced metal costlier for non-U.S. investors.
Gold prices hit a six-month low last week, weighed down by a firm dollar and as the Fed kept its outlook for higher interest rates.
Meanwhile, speculators trimmed their net long position in COMEX gold to the weakest in 2-1/2 years in the week to June 19, data from the U.S. Commodity Futures Trading Commission showed on Friday.
In other precious metals, silver fell 0.7 percent to $16.31 an ounce. Platinum was 0.1 percent higher at $873.70 per ounce.
It touched $851.74, the weakest since February 2016, in the previous session. Palladium was down 0.6 percent at $951.22 per ounce.
The metal slipped to a seven-week low of $947.15 an ounce on Friday.
