Mumbai: Gold retreats fell early on Monday after hitting its highest level in over a year in the previous session, with a recovery in the US dollar reining in any upward momentum in the metal.
Spot gold was down 0.7 per cent at $1,337.00 an ounce by 0053 GMT. It hit its highest since August 2016 at $1,357.54 the session before. US gold futures for December delivery were also down 0.7 per cent at $1,341.70 an ounce.
North Korea throws a party
The US dollar won a reprieve from risk aversion on Monday after North Korean dictator Kim Jong Un decided to hold a party over the weekend rather than launch another missile, tempering safe havens like the yen and Treasuries.
North Korea warned on Monday the United States would pay a “due price” for spearheading a UN Security Council resolution against its latest nuclear test, as Washington presses for a vote on a draft resolution imposing more sanctions on Pyongyang.
US govt debt limit
President Donald Trump had signed a bill on Friday extending the government debt limit for three months and providing about $15 billion in hurricane-related aid, bringing his surprising deal with Democratic congressional leaders this week to completion.
It is too soon to predict when the Federal Reserve should next raise US interest rates as it continues to tighten policy, given “cross currents” in the economy and markets, New York Fed President William Dudley had said on CNBC TV on Friday.
European Central Bank policymakers had agreed at their meeting on Thursday that their next step would be to begin reducing their monetary stimulus, three sources with direct knowledge of the discussion said.
Bank of England rate setters won’t shock markets with any policy moves when they meet next week as a struggling economy and Br-exit fears offset any concerns over Gold retreats inflation sailing well above target.
China to scrap reserve requirements
China’s central bank plans to scrap reserve requirements for financial institutions settling foreign exchange forward yuan positions with effect from Monday, four sources with direct knowledge of the matter had said on Friday.
Speculators raised their net long position in COMEX gold for the eighth straight week to the highest in nearly a year in the week to September 5.
SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.28 percent to 834.50 tonnes on Friday from 836.87 tonnes on Thursday