Gold prices inched down on Monday to a more than one-week low as progress in U.S.-China trade talks lifted risk sentiment, taking the sheen off safe-haven bullion, even as the U.S. dollar weakened.
Spot gold edged 0.3 per cent lower to $1,286.74 per ounce as of 0930 GMT, having touched $1,285.48, its lowest since April 5.
U.S. gold futures fell 0.4 per cent to $1,289.70 an ounce.
“Gold has clearly lost the upward trajectory that it was on, trying to find new supportive catalysts.
“We’ve seen continued positive murmuring on the trade negotiations in recent days.
“That’s obviously a headwind for safe-haven gold,’’ Capital Economics analyst, Ross Strachan, said.
U.S. Treasury Secretary, Steven Mnuchin, said he hoped U.S.-China trade talks were approaching a final lap.
That, combined with strong Chinese export and eurozone industrial production data on Friday, has lifted global equities, bond yields and the euro.
“The continued positive, coming out of equity markets, is acting as a drag on gold prices as people have liquidated their positions,’’ Strachan said.
Gold fell below $1,300 last week and that was seen as a negative bias in charts used by technical traders, analysts and traders said.
The yellow metal may now revisit its April 4 low of $1,280.59 per ounce, Reuter’s technical analyst, Wang Tao, said.
“Gold is trading directly on the technically important 100-day moving average at $1,288 per troy ounce.
“This line has held firm several times in the past two weeks,’’ Commerzbank analysts said in a research note.
“However, if gold were to dip below it this time, technical follow-up selling would probably ensue, exerting further pressure on the price.’’
A stronger U.S. economic picture of late has also dampened the appeal of the non-yielding metal, with U.S. reports on Friday showing import prices surpassed expectations and consumer sentiment seen stabilising.
In other metals, increased inflows were observed into platinum, while palladium saw outflows for a seventh consecutive week, analysts at Societe Generale, wrote in a note.
Spot platinum rose 0.3 per cent to $888.25 per ounce whereas palladium fell 0.4 per cent to $1,366.20 per ounce.
Silver was 0.1 per cent lower at $14.94 an ounce.