Monday, 10 September 2018

Gold holds losses on rate hike views, trade worries

Gold held on to a small loss from the previous session on Monday, as the dollar firmed amid expectations of a U.S. Federal Reserve interest rate hike in September and fears of escalating trade tensions between the United States and China.

Spot gold was down 0.1 percent at $1,194.61 at 0225 GMT, having fallen 0.4 percent in the previous session.

U.S. gold futures were almost flat at $1,200.30 an ounce.

"The strong U.S. nonfarm payrolls led to some modest downward pressure on gold ... Going forward though, the U.S dollar will continue to weigh on gold, and as long as the dollar is strong, gold will remain constrained," said John Sharma, an economist at National Australia Bank.

Stronger-than-expected U.S. payrolls data on Friday cemented expectations that the U.S. Fed will raise interest rates in September, in what would be its third hike this year.

The dollar firmed against a basket of major currencies on Monday thanks to the jobs data and after U.S. President Donald Trump warned tariffs on a further $267 billion worth of Chinese imports, on top of earlier promises to levy duties on $200 billion worth of Chinese goods.

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