Gold fell on Monday as uncertainties around the U.S.-China trade war drove some investors to the safety of the dollar, pressuring assets priced in the U.S. currency.
Autocatalyst metal palladium however rallied to another record high, with expectations for a deficit this year helping it to breach the $1,700 an ounce level for the first time.
Spot gold fell 0.4% to $1,490 per ounce at 0743 GMT, after prices hit $1,486.60 in the previous session, their lowest since Sept. 18. U.S. gold futures dipped 0.6% to $1,496.60 per ounce.
The dollar index held near its highest in a week.
“In the short term, investors are sliding towards a dollar-denominated safe-haven appeal,” said AxiTrader market strategist Stephen Innes.
European and Asian stock markets, including China’s, were little changed on Monday, shrugging off news that the U.S. administration is considering delisting Chinese companies from U.S. stock exchanges.
The White House is not contemplating such a move at this time, Bloomberg quoted Treasury spokeswoman Monica Crowley as saying on Saturday, after Reuters reported on Friday the U.S. administration was considering the measure.
“Gold remains on the uptrend for the long term but in the short term, there is some confusion considering the contradicting headlines we are getting on the trade war,” Innes added.
Ahead of trade talks with the United States, Chinese Vice Commerce Minister Wang Shouwen said on Sunday the two major economies would resolve their trade dispute “with a calm and rational attitude”.
Investors were also awaiting clues on U.S. interest rate policy. Philadelphia Federal Reserve Bank President Patrick Harker said on Friday he opposed the central bank’s September rate cut and thinks it should “hold firm” on interest rates.
Higher interest rates tend to reduce investor interest in non-yielding bullion.
“A less dovish than expected Fed means the rally on gold prices may be capped, but in the near term, the upward momentum appears intact,” said Howie Lee, economist at OCBC Bank.
Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.22% to 922.88 tonnes on Friday.
Speculators raised their bullish positions in COMEX gold and reduced bullish bets on silver contracts in the week to Sept. 24, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Elsewhere, palladium rose 0.8% to $1,694.85 per ounce, after hitting a record high at $1,700.71 earlier in the session.
Silver dropped over 1% to $17.33 per ounce and platinum was down nearly 1% to $929.77 per ounce.