Gold dropped below $1,400 when trading reopened yesterday, following the seeming progress made on the U.S.-China trade war during the G20 on Saturday. Gold prices fell nearly 2% on Monday to their lowest in more than a week as the dollar strengthened and investors opted for riskier assets. However, the yellow metal has been inching back closer to $1,400 as the morning has progress. Currently, spot gold is at $1,393.
U.S. President Donald Trump and Chinese President Xi Jingping agreed over the weekend to resume negotiations following a meeting on the sidelines of the Group of 20 summit in Osaka, Japan. The dollar index increased.
While in Asia, Trump also met with North Korean leader Kim Jong-un. On Sunday, Trump became the first U.S. president to cross into North Korea.
Currently Comex Gold futures for the August contracts are $1,396.10, down $17.60. They had settled at $1,413.70 on Friday.
Silver futures for the Comex August Contract are at currently $15.235, down $0.116. Spot platinum, which is sensitive to the growth of the Chinese automotive industry, is up this morning at $849, up $10.00 and spot palladium was at $1,555, up $2.60.
Investors are likely to turn to economic data for direction this week, though trading may be light because of the Fourth of July holiday on Thursday, when U.S. financial markets will be closed.
The economic reports will likely be read closely for signs on whether they will give the U.S. Federal Reserve enough fodder to cut interest rates at policy makers’ July 31 meeting. The CME FedWatch Tool has kept the odds of a rate cut this month at 100% since the Federal Open Market Committee’s last meeting in June.
Activity in China’s manufacturing sector cooled in June, moving into contraction territory, MarketWatch reported on Monday. The Caixin China manufacturing purchasing managers’ index fell to 49.4 in June from 50.2 in May as trade tensions with the U.S. trimmed orders and production, Caixin Media Co. and Markit data showed.
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U.S. manufacturing data are scheduled to come out later Monday. Another major indicator – the U.S. monthly jobs report for June – is scheduled for release on Friday.