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Gold rises further as US dollar eases

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[BENGALURU] - Gold prices rose further on Monday as the dollar eased to its lowest in nearly two weeks after US President Donald Trump criticised the Federal Reserve's interest rate tightening policy.

Spot gold was up 0.2 per cent at US$1,234.24 an ounce at 0045 GMT, after rising 0.7 per cent in the previous session. US gold futures for August delivery were 0.3 per cent higher at US$1,234.20 an ounce.

The dollar index , which measures the greenback against a basket of six major currencies, was down 0.2 per cent at 94.252. It fell to its weakest since July 11 earlier in the session.

Mr Trump on Friday dug in on his criticism of the Federal Reserve's policy on raising interest rates, saying it takes away from the United States' "big competitive edge." Mr Trump on Friday said he was ready to impose tariffs on all US$500 billion of imported goods from China, threatening to escalate a clash over trade policy that has unnerved financial markets.

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A policy debate in China on how best to address slowing growth deepened on Friday, as analysts urged authorities to boost fiscal stimulus amid rising risks to the world's second-biggest economy from a bitter trade conflict with the United States.

Global finance leaders called on Sunday for stepped-up dialogue to prevent trade and geopolitical tensions from hurting growth, but ended a two-day G20 meeting with little consensus on how to resolve multiple disputes over US tariff actions.

The Bank of Japan, facing stubbornly low inflation, is in unusually active discussions before this month's policy decision, with changes to its interest-rate targets and stock-buying techniques on the table, people familiar with the central bank's thinking told Reuters. Japanese government bond prices fell sharply on Monday, with the benchmark 10-year yield hitting its highest level in nearly six months, following reports that the Bank of Japan is actively discussing changes to its policies.

Iranian President Hassan Rouhani on Sunday cautioned Trump about pursuing hostile policies against Tehran, saying "war with Iran is the mother of all wars", but did not rule out peace between the two countries.

A drop in prices spurred some interest for physical gold in major Asian hubs last week, but failed to stoke significant demand in India as buyers awaited bigger dips. Hedge funds and money managers switched to a net short position in COMEX gold contracts for the first time since 2016 in the week to July 17, US Commodity Futures Trading Commission data showed on Friday.

REUTERS

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