Gold cuts losses after reports say US mulling delisting China stocks

[BENGALURU] Gold pared some losses on Friday, after falling more than 1 per cent, as investors opted for the safety of the metal following reports the United States is considering delisting Chinese companies from US stock exchanges.

Spot gold was down 0.5 per cent at US$1,498.07 an ounce as of 02:33 pm EDT (1833 GMT) after touching its lowest since Sept 18 at US$1,486.60 earlier in the session. The metal was still down about 1.2 per cent for the week.

US gold futures settled down 0.6 per cent to US$1,506.40 an ounce.

US President Donald Trump's move to delist Chinese companies from US stock exchanges would be a part of a broader effort to limit US investments into China, a source briefed on the matter said.

"The reports probably brought a little bit of short covering and put the US-China trade war back on the table," said Jim Wyckoff, senior analyst with Kitco Metals.

Earlier in the session, gold prices had slipped as much as 1.3 per cent as the dollar rose to a three-week peak amid doubts whether the US Federal Reserve will cut interest rates again in October.

"Central bank easing is being called into question as many Fed officials are saying that maybe we don't need as much ongoing stimulus in the market," said David Meger, director of metals trading at High Ridge Futures.

On Thursday, Fed Vice Chair Richard Clarida said US inflation expectations are currently in line with the central bank's 2 per cent goal, an indication that he does not see a pressing need for new rate cuts to boost inflation.

"The US durable goods number also came better than expected and people are getting out of gold here just because that data does not support another rate cut," said Bob Haberkorn, senior market strategist at RJO Futures.

Data earlier on Friday showed US durable goods orders rose 0.2 per cent in August versus an expectation of -1 per cent.

"While global central bank easing, (the US-China) trade war, economic growth concerns, geopolitical tensions in Mideast and other places, alternative investment demand due to recessionary fears will remain in place, at this moment they look wobbly and are allowing this pullback in the gold market," High Ridge Futures' Meger said.

Among other precious metals, silver fell 1.5 per cent to US$17.54 an ounce.

Platinum slipped 0.1 per cent to US$929.02 and was on track for its worst week in over a month.

Palladium was up 0.9 per cent to US$1,682.56 an ounce. The auto-catalyst metal, which is in short supply, was up nearly 2.5 per cent for the week and on track for a eighth straight weekly gain.

Reuters