Gold eased overnight in holiday-thinned trade as some investors took profits, though lingering US-China tensions and extensive stimulus measures by governments worldwide limited decline. Spot gold fell 0.3 per cent to $US1,728.55 per ounce by 1758 GMT. US gold futures fell 0.5 per cent to $US1,727.40. Most markets were closed in the United States, Britain and some Asian countries for public holidays. “With all the uncertainties going on in the world and governments injecting money into their economies and interest rates going lower, gold specifically has a good possibility to test new highs sooner than later,” said Afshin Nabavi, senior vice president at precious metals trader MKS SA. Profit taking, lack of volume and follow-through on the upside were weighing on gold on Monday, Nabavi added. European shares gained on optimism over easing lockdowns and signs of more stimulus for the euro zone economy.
Last week, gold climbed to its highest since October 2012, driven by monetary and fiscal stimulus, recession fears and US-China tensions.
Trade war tensions are on the rise, which should continue to support gold prices over the short term, Stephen Innes, chief market strategist at financial services firm AxiCorp, said in a note.
Beijing’s proposed national security legislation for Hong Kong could lead to US sanctions, White House National Security Adviser Robert O’Brien said on Sunday.
China’s gold imports via Hong Kong in April plunged 176 per cent to -10.3 tonnes versus the previous month, data showed on Monday.
SPDR Gold Trust holdings rose 0.4 per cent to 1,116.71 tonnes on Friday, while speculators increased bullish positions in COMEX gold contracts in the week to May 19.
Palladium gained 2.3 per cent to $US1,991.50 per ounce, while platinum rose 0.6 per cent to $US844.75, and silver rose 0.1 per cent to $US17.20.