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PRECIOUS-Gold dips as dollar holds onto gains; U.S.-China spat in focus

Published 10/08/2020, 02:19 pm
Updated 10/08/2020, 05:18 pm
© Reuters.
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* Specs cut gold bullish positions in week ended Aug 4 - CFTC

* Japan, Singapore markets closed for public holidays

* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)

By Brijesh Patel

Aug 10 (Reuters) - Gold prices fell on Monday as the dollar held onto gains made after better-than-expected U.S. payrolls data, while investors kept a close eye on Sino-U.S. relations ahead of scheduled trade talks.

Spot gold XAU= was down 0.3% at $2,029.19 per ounce by 0701 GMT. U.S. gold futures GCcv1 rose 0.6% to $2,039.60. Japanese and Singapore markets were closed for public holidays.

Gold hit a record high of $2,072.50 on Friday before retreating nearly 2% as the dollar bounced on data showing U.S. nonfarm payrolls increased by 1.763 million jobs in July. USD/ stronger dollar narrative is weighing on investors' decisions, along with the fact that people will be more (prone) to profit-taking after such a big run-up," said Stephen Innes, chief market strategist at financial services firm AxiCorp.

"A correction is very possible here. It really depends on how market views the overall dollar, with U.S.-China trade escalation sort of favourable to the dollar."

The dollar has, on occasion, been the favoured safe haven amid flare-ups in tensions between Washington and Beijing. Last week, U.S. President Donald Trump took steps to ban two popular Chinese apps. USD/ is room here for people to unwind some of their gold exposure," said DailyFx currency strategist Ilya Spivak, since it appears the U.S. Federal Reserve might start "to take their foot off the gas" on aggressive stimulus after recent better economic data.

Speculators reduced their bullish positions in COMEX gold and silver contracts in the week to Aug. 4. CFTC/

But gold's appeal as a safe haven has been underpinned by the uncertainty driven by the COVID-19 pandemic, with resultant widespread global stimulus also fuelling concerns of inflation. the United States, which has marked a grim milestone of 5 million cases, Trump signed executive orders on Saturday partly restoring enhanced unemployment payments to millions of Americans. XAG= gained 0.2% to $28.33 per ounce, platinum XPT= rose 1% to $970.86 and palladium XPD= was steady at $2,177.08.

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