Gold prices hit year-to-date low as trade comments lift stocks, dollar

NEW YORK/LONDON — Gold on Monday marked a new low for the year to date after US Treasury Secretary Steven Mnuchin’s declaration that a trade war between China and the United States was “on hold” helped boost appetite for higher-risk assets, such as stocks.

Buoyancy in US Treasury yields also weighed on appetite for non-interest-bearing assets, like bullion, analysts said.

Spot gold fell to its lowest since late December at $ 1,281.76 an ounce (/oz), and was down 0.03% at $1,291.1 per ounce by 1:34 p.m. EDT (1734 GMT). US gold futures for June delivery settled down 40 cents, or 0.03%, at $1,290.90/oz.

“The dollar’s riding high and the 10- year ( Treasury note’s) yield has broken above 3.05% for the first time since 2011,” said Mitsubishi analyst Jonathan Butler.

A stronger dollar makes assets priced in the US greenback more expensive for holders of other currencies, while a bounce in yields had added to pressure on gold.

“With the China trade news, international investors sold off gold,” said Michael Matousek, head trader at US Global Investors.

The world’s two largest economies stepped back from the brink of a global trade war and agreed to hold further talks aimed at boosting US exports to China.

Gold prices last week fell below the psychologically important level of $1,300 an ounce, and posted the first weekly close below the 200- day moving average since late December.

The yellow metal is also being weighed down by expectations that the Federal Reserve will lift US interest rates again next month. Higher interest rates make non- yielding assets like gold less attractive to investors.

Naeem Aslam, chief market analyst at Think Markets, said investors were now looking ahead to this week’s meeting of the Federal Open Market Committee, which sets rates.

“If the Fed doesn’t tame its hawkish stance, we would expect more weakness in the gold price,” he said.

Mitsubishi’s Mr. Butler said gold could benefit from safehaven buying in the long run if that exuberance loses steam and inflation pressures mount.

Platinum gained 1.9% at $899.50/oz, after also marking a fresh low for the year in earlier trade at $ 873.50/oz. Silver was up 0.40% at $16.49/oz, while palladium, the most industrial of the major precious metals, jumped 2.90% to $990.72/oz. —