Gold futures struggled for direction Monday as investors assessed a so-called phase-one trade deal between the U.S. and China.
President Donald Trump and Chinese officials on Friday announced an agreement on a preliminary U.S.-China trade pact. Gold gained ground in Friday’s session, however, boosted by a weaker U.S. dollar and a fall in Treasury yields. A weaker dollar makes commodities priced in the currency to cheaper to users of other currencies, while lower yields decrease the opportunity cost of holding nonyielding assets.
However, analysts said a lack of detail and other uncertainties could allow gold to find haven-related interest, driving prices higher.
“I do think the bulk of the negative news for gold might be finally out of the way, and the markets seem to be positioning for any disappointment on the U.S.-China trade developments if and when China responds; this could add 1-2% of the upside for gold from current levels,” said Stephen Innes, chief Asia market strategist at AxiTrader, in a note.
March copper HGH20, +1.11% was up 1.2% to $2.8135 a pound.