Gold prices slipped on Friday from a one-month high hit in the previous session as investors booked profits and the dollar strengthened, while worries over US-China trade dispute capped losses. Spot gold fell 0.3 percent to $1,298.25 per ounce at 0704 GMT, after reaching its highest since May 15 at $1,309.30 an ounce on Thursday.
US gold futures for August delivery were down 0.5 percent at $1,301.50 per ounce. The dollar index, which measures the greenback against a basket of six major currencies, rose 0.3 percent to 95.079. It hit its highest in over seven months earlier in the session.
"We saw a little bit of selling early this morning, a little bit of profit-taking ... Gold was unable to hold above this (previous days highs), so again we are sitting back in sort of that $1,290-$1,305 range," said MKS SA senior precious metals dealer Alex Thorndike. Investors are keeping a close tab on trade tensions between the world's top two economies and if the United States imposes tariffs on Chinese goods, gold could test the overnight highs of $1,309-$1,310 an ounce, said Thorndike.
With the looming US-China trade deadline, investors continue to view gold as an excellent hedge against a possible equity market tumult if trade war escalates beyond the status quo, said Stephen Innes, APAC trading head at OANDA.
"An escalation of trade war could prove extremely disruptive for financial markets, so gold should hold its bid as we enter another phase of geopolitical uncertainty," he said.
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