Gold set for first annual decline in three years-
Gold fell on Monday as equities gained on likely progress in Sino-U.S. trade standoff, amid bullion prices heading for their first annual decline since 2015, losing to the dollar mostly on trade worries and rising interest rates.
However, the precious metal was on track for its best month since January 2017, having scrambled back from sharp declines in the year due to volatility in equities and a subdued dollar, along with worries over slowing global growth.
Spot gold XAU= fell 0.2 percent to $1,279.17 per ounce as at 0622 GMT on Monday, near a six month high of $1,282.09 it hit on Friday.
U.S. gold futures GCv1 dipped 0.1 percent to $1,281.5 per ounce.
“The trade war concerns between the U.S. and China is slightly cooling down and that has lent support to the equity market,” said Ajay Kedia, director at Kedia Commodities in Mumbai, adding that there is some profit booking in gold ahead of the year-end.
China’s President Xi Jinping said on a telephone call with U.S. President Donald Trump on Saturday that he hopes to push forward a Sino-U.S. relationship that is coordinated, cooperative and stable, Chinese state media reported. prices jumped about 5 percent in December. The metal declined nearly 2 percent for the year.
The dollar index .DXY has gained 4.6 percent this year as the U.S. currency had been the preferred safe haven this year as the U.S.-China trade conflict unfolded against a backdrop of higher U.S. interest rates, denting gold’s demand.
Higher interest rates make gold less attractive since it does not pay interest and costs to store and insure.
Gold dropped over 15 percent from a peak of $1,365.2 in April to a 1-1/2-year low in August this year to $1,159.96. The yellow metal has gained nearly 10 percent since then.