Supply Chain Council of European Union |

Gold slips on firm dollar, positive China factory data

(Reuters) – Gold prices fell on Monday as investors turned to riskier assets on signs of economic growth following reports of an expanding Chinese factory sector and a rising dollar reduced demand.

FILE PHOTO: A sales assistant takes out gold ornaments for a customer at Caibai Jewelry store, in Beijing, China, August 6, 2019. REUTERS/Jason Lee

Spot gold XAU= fell 0.3% to $1,459.23 per ounce by 0332 GMT. Prices earlier touched their highest since Nov. 22. U.S. gold futures shed 0.5% to $1,465.30.

“A slightly stronger dollar has weighed on investor appetite for gold, as well as some slightly more positive data, so this is causing gold to drift a little bit lower,” ANZ analyst Daniel Hynes said.

An unexpected expansion in factory activity during November in China, the world’s second-largest economy and biggest gold user, spurred investors into equity markets and reduced the interest in safe-haven bullion.

This followed official government data on Saturday that also showed an expansion.

Investor demand for gold was further pressured by the rising dollar, which makes dollar-denominated gold more expensive for buyers using other currencies.

The uncertainty around a resolution to the 17-month-old trade dispute between the United States and China has supported gold, with reports that a preliminary agreement has now stalled because of U.S. legislation supporting protestors in Hong Kong and Chinese demands that the United States roll back its tariffs as part of phase one deal.

“Nothing particularly has really changed (on the trade front) from last week, the market remains in the dark about how things will progress. Investor appetite for gold is just waning a little bit on lack of direction,” Hynes said.

Gold has risen more than 13% this year mainly due to the trade dispute war driving demand for safe assets.

“The fundamentals are still quite supportive, this lull is not going to last too much longer. Maybe into year end we will see gold prices recommit the uptrend we saw earlier this year,” Hynes said, adding until then gold will trade between $1,450-$1,500.

Elsewhere, silver XAG= fell 0.6% to $16.92 per ounce, platinum XPT= shed 0.4% to $896.72 and palladium XPD= was down 0.1% to $1,840.09.

Reporting by Sumita Layek in Bengaluru; Editing by Christian Schmollinger

Related posts

Western media’s news factory on India is well-oiled and kicking — RT Op-ed


Disney Parks: The Mandalorian Droid Factory set now available


WWII-era ammunition found at Tesla factory site near Berlin