Gold Flat Amid Rate Hike Expectations, Trade Tensions

On Monday, Gold prices were flat amid expectations of a Federal Reserve rate hike and trade war tensions lowered investor sentiment.

Comex gold futures for December delivery fell 0.08% to $1,199.40 a troy ounce as of 4:43 AM ET (8:43 GMT).

The price of gold was flat as Friday’s upbeat jobs repor increased expectations of a Fed rate hike in September.

Expectations of higher interest rates tend to boost the dollar by making the currency more attractive to yield-seeking investors.

Higher rates are a negative for gold as the precious metal, which does not pay interest, struggles to compete with yield-bearing assets when rates rise.

Trade tensions with China continued, as U.S. President Donald Trump warned he would impose tariffs on $267 billion worth of Chinese imports, on top of an earlier promise of tariffs on $200 billion worth of Chinese goods.

Trade worry and rate hike expectations have pushed the greenback near a one-year high, which weighed on gold. The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.21% to 94.84.

Gold usually falls as the dollar rises, as it is denominated in the U.S. currency and is sensitive to moves in the dollar. Bullion becomes more expensive for holders of other currencies when the dollar rises and cheaper when it falls.

Other metals were mixed on the Comex, with silver futures up 0.46% to $14.235 a troy ounce. Among other precious metals, Platinum Futures rose 0.33% to $783.00 while Palladium Futures decreased 0.23% to $966.60 an ounce. Copper futures slumped 0.55% to $2.608 a pound./

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