Gold Prices Increases As Dollar Eases; Gains Were Limited As Equities Rises

Gold Prices
Gold bars at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna, Austria (Photo: Reuters)

The progress in the China-United States trade talks and the surging Chinese economic data caused gold prices to increase on Monday as the dollar backed off three-week highs. Gains in the metal, however, are capped as equities increases.

Market data showed that Spot gold closed 0.1 percent higher reaching $1,293.15 per ounce by 0337 GMT after it recovers from its lowest value since March 8 at $1,286.35 in the previous session. United States gold futures declined by about 0.1 percent at $1,297.90 an ounce.

The value of the United States dollar is down by 0.1 percent compared to its rivals after reaching its peak since March 11 on Friday. Sian stocks significantly increased after Chinese factory data showed positive growth and as the Chinese-United States trade talks showed signs of progress.

Kyle Rodda, a market analyst with IG Markets in Melbourne, said that the most extreme part of the global growth slowdown panic has subsided a little bit and the Chinese data is responsible for that, but it is a single data point which should be backed by more data. The analyst added that we are getting a lot of data from across the globe (this week) so the global growth story and the fears related to that will be tested in the very short term.

An official survey released on Sunday reflected that factory activity in China increased following its four months decline in March. The data emphasized that the government's stimulus measures are starting to take hold.

According to Phillip Futures, though Asian PMIs have demonstrated for respite in the current term, we opine that a synchronized economic slowdown remains in place in lieu of weakness in both domestic and foreign demand.

The investors closely observe the trade talks between the United States and China. The United States President announced on Friday that the trade talks with China were going well. He, however, said that he would not accept anything less than a "great deal. Trade negotiators of the two nations met in two days of negotiations in China. The talks are expected to continue later this week during the visit of Chines Vice Premier Liu He in the United States.

Aside from gold, other metals also increased in value. Spot palladium closed 0.1 percent higher at $1,384.70 an ounce following its huge decline of 11 percent last week. Silver also increased by 0.2 percent reaching $5.16 an ounce.

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