By Barani Krishnan
Investing.com - Each upbeat remark about U.S.-China trade talks is pressuring gold bugs, complicating their return to $1,300 levels.
Gold futures for April delivery settled down $11.70, or 1%, at $1,287.50 per ounce on the Comex division of the New York Mercantile Exchange on Monday, easing for a sixth-straight day. Comex gold fell on Friday below $1,300, a perch it had held since Jan. 20.
Spot gold, reflective of trades in physical bullion, slid by $6.08, or 0.5%, to $1,287.44 per ounce by 1:38 PM ET (18:38 GMT).
In the latest session, gold dived as 10-year U.S. Treasury yields shot up to six-week highs of 2.77%. Higher yields make gold, which doesn't bear interest, less attractive relative to rival safe-haven assets.
The dollar, another contrarian trade to gold, was higher too, adding to the weight on the yellow metal.
The dollar index, which measures the greenback against a basket of six currencies, was up 0.2% at 96.60. It scaled a near-two-week high of 96.748 earlier as the greenback resumed control of its narrative as the best hedge to the U.S.-China conflict. While some have counted on gold as a safe haven to the trade war, the dollar has held the higher ground here.
Rival assets to gold rallied after a Bloomberg report quoting a spokesman for China’s National People’s Congress as saying substantial progress has been made in trade negotiations with Washington over the past week.
Just days ago, U.S. Trade Representative Robert Lighthizer admitted the Trump administration was having problems reaching closure in its tariff war with Beijing. But the Bloomberg report on Monday quoted people familiar with the trade discussions as saying that a deal was possible so long as Beijing stuck to pledges ranging from protection of intellectual property to purchase of U.S. products.
Palladium fell too, although its wide premium to gold retained its standing as the world's priciest metal.
The spot price of palladium was down $16.95, or 1.1%, at 1,530.75 per ounce by 1:39 PM ET. On Wednesday, spot palladium hit a record high of $1,569.40 as investors plowed into the auto-catalyst metal due to its shrinking supplies.
Trades in other Comex metals as of 1:38 PM ET (18:38 GMT):
Palladium futures down $19.20, or 1.3%, at $1,486.90 per ounce.
Platinum futures down $24.30, or 2.8%, at $839.40 per ounce.
Silver futures down 5.2 cents, or 0.3%, at $15.12 per ounce.
Copper futures down 2 cents, or 0.8%, at $2.91 per pound.