Gold prices edged slightly higher on Monday due to a softer dollar and amid lingering concerns about the impact of U.S.-China trade war on the global economy.
The dollar weakened against most major currencies, resulting in the dollar index falling to a low of 94.59 at one stage. Despite recovering to 94.70 subsequently, the index was still down by about 0.4%.
Meanwhile, around late morning today, U.S. President Donald Trump confirmed earlier reports that the U.S. and Mexico have reached an agreement on trade.
Trump indicated the U.S.-Mexico trade agreement would replace NAFTA, which he claimed hurt the U.S. “very badly.”
Trump has now suggested he would seek to negotiate a separate trade agreement with Canada and would raise tariffs on imports of Canadian cars if a deal could not be reached.
Gold futures for December ended up $2.70, or 0.2%, at $1,216.00 an ounce.
On Friday, gold futures ended up $19.30, or 1.6%, at $1,213.30 an ounce. Gold gained 2.5% last week, its first weekly gain in about seven weeks.
Silver futures for September settled at $14.859 an ounce, gaining $0.065, while Copper futures ended up $0.080 at $2.7085 per pound.
After gaining in strength and moving past the 96 mark recently amid expectations the Fed would hike interest rates in September and then again in December, the dollar struggled to sustain at higher levels after Trump criticized the Fed’s rate hike moves.
Last Friday, the Federal Reserve Chair Jerome Powell, who spoke at the Kansas City Fed’s annual policy symposium in Jackson Hole said that the strength of the U.S. economic expansion justifies gradual interest rate hikes.
Powell said, “There is good reason to expect that this strong performance will continue,” and added “As the most recent FOMC statement indicates, if the strong growth in income and jobs continues, further gradual increases in the
target range for the federal funds rate will likely be appropriate.” Powell also said that he would do whatever is necessary to avoid another financial crisis.