Gold prices tumbled on Monday, as the dollar surged higher amid speculation about a rate hike in December and on slowing Chinese economy.
Mounting worries about Italy – European Union spat too contributed to gold’s plunge.
China’s Finance Minister Liu Kun said that although some regions and companies have been affected, the country is capable of minimizing the impact of the ongoing trade war.
On Sunday, the People’s Bank of China said that it will reduce the ratio of cash that banks should retain as reserves by 100 basis points, with effect from October 15. The reduction is set to release $175 billion.
Gold futures for December ended down $17.00, or 1.4%, at $1,188.60 an ounce, the lowest settlement since September 27.
On Friday, gold futures ended up $4.00, or 0.3%, at $1,205.60 an ounce.
Silver futures for December settled at $14.329 an ounce, losing $0.320 for the session.
Copper futures for December ended up $0.0040, at $2.7670 per pound.
The dollar index, which rose to 95.70, gave up some gains subsequently and was hovering around 95.45 later in the session.
The Federal Reserve, which has increased interest rates three times so far this summer, is widely expected to hike rate once again in December. With another three rate increases in 2019 likely, the dollar may continue to sustain at higher levels against most major currencies.