Gold dips to 5-week low

Gold made a 5-week low on the back of optimism regarding a possible trade deal between the United States and China, on Monday.

The trade deal, if successful, would lead to a roll back of US tariffs on at least US$200 billion worth of Chinese goods and possibly end the dispute between the two largest economies. This led to an increase in appetite for riskier assets which led to positive sentiments in the global market and a reduction in demand for safe-haven asset, gold.

The dollar index was at a 10-day high against a basket of other currencies as the US Treasury yields rose. This translated into higher demand for the currency.

The holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF) registered a 1.5 per cent fall on Friday, their biggest one-day percentage fall since December 2016.

Spot gold prices were down 0.7 per cent at US$1,284.10 per ounce. The precious metal slipped below the key level of US$1,300 on Friday.