LONDON: Gold prices edged lower for a second session on Monday as trade tensions between China and the United States helped to boost the dollar and weaken the yuan.

US President Donald Trump said on Friday that he was ready to impose tariffs on virtually all Chinese imports, representing a further $267 billion of goods in addition to the $200bn already facing potential duties, prompting a threat by China to retaliate.

“That gold is below $1,200 an ounce again is mainly to do with the dollar,” said ABN AMRO analyst Georgette Boele.

“I expect the uncertainty around the yuan should calm down a bit and that should support prices,” she said, predicting that gold would end the year around $1,250.

Spot gold was down 0.1 per cent at $1,193.93 at 1122 GMT, slipping towards the 19-month low of $1,159.96 touched last month. US gold futures were 0.1pc down at $1,199.

Gold has tumbled more than 12pc from a high of $1,365.23 in April, mirroring a 10pc fall in the value of the yuan against the dollar.

The dollar has gained broadly against other currencies this year and was boosted again on Friday by strong US jobs data that suggested that the Federal Reserve will continue to raise interest rates. A rate increase is expected this month.

Higher interest rates hurt gold because they increase bond yields, making non-yielding bullion less attractive, and tend to boost the dollar.

“We could see a first positive signal only if prices return above $1,200, with space for further recoveries to $1,210 and $1,230,” said ActivTrades analyst Carlo Alberto De Casa.

In other precious metals, spot silver was up 0.6pc at $14.19, platinum rose 0.9pc to $785.70 and palladium was up 0.3pc at $983.20.

Published in Dawn, September 11th, 2018