Gold edged up on Monday, erasing losses from earlier in the session as fresh doubts over a US-China trade deal pushed Wall Street into the red. Spot gold was up 0.3% at $1,471.92 per ounce as of 01:51 p.m. ET (1851 GMT), reversing course from earlier when prices fell to as low as $1,455.87 on optimism constructive trade talks had taken place between the world's two largest economies over the weekend.
US gold futures settled up 0.2% at $1,471.90 per ounce. However, a report that Beijing was not as optimistic, owing to US President Donald Trump's reluctance to roll back tariffs, threw cold water over market cheer and on worldwide stock markets that were near record levels.
"I am surprised how robustly the market reacts (to news on the trade talks). This isn't the first time we have had this news, but the market keeps responding," said Bart Melek, head of commodity strategies at TD Securities, adding the report on pessimism from Beijing has triggered a rebound in gold prices.
"It looks like gold is seeking a move towards $1,480, which is the 100-day moving average." The 16-month long Sino-US tariff war has fanned recessionary fears, but recent optimism over a phase one deal had driven a rally in equity markets.
Gold is considered an attractive investment during times of political or economic uncertainty. It is highly sensitive to interest rates, as lower rates reduce the opportunity cost of holding the non-yielding bullion. Among other metals, silver gained 0.6% to $17.04 an ounce, while palladium rose 2% to $1,739.60 an ounce. Platinum was up 0.5% at $893.74, extending gains for a fourth straight session.
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