Investing.com - Gold prices stood firm Monday in the face of a widespread risk-on rally in global markets, as traders refused to abandon their hedge against a breakdown in U.S.-China talks and still-lower interest rates.
Bond yields rose and stocks around the world rallied after U.S. Commerce Secretary Wilbur Ross hinted at cutting Chinese telecoms group Huawei, a notable hostage of the trade dispute, some slack by loosening a ban on U.S. companies selling to it. In addition, risk assets also liked Ross' comments that fresh import tariffs on European and Asian autos may not be needed.
U.S. Treasury bond yields rose as traders moved out of bonds and pushed the Dow Jones index to a new record high, but there was no meaningful drop in gold prices.
By 11 AM ET (1600 GMT), gold futures for delivery on the Comex exchange were down less than 0.1% at $1,510.95 a troy ounce. Spot gold was down 0.4% at $1,507.80.
Speculative interest in gold hit its highest level in six weeks last week, according to data released on Friday by the Commodity Futures Trading Commission, after market participants looked through the Federal Reserve’s latest interest rate cut and its guidance that appeared to rule out any further easing in the near term.
Analysts at JPMorgan (NYSE:JPM) led by Natasha Kaneva said in a weekly note that the price action suggested many were still prepared to bet on another cut in rates in 2020. However, they warned that “looking into next year, a Fed on hold would represent a significant downside risk to our bullish outlook on gold prices.”
JPMorgan expects gold to be trading around $1,800 by the fourth quarter of next year.
Elsewhere Monday, silver futures dipped 0.2% to $18.02 an ounce, while platinum futures retreated 1.0% from a six-week high of $959.90 an ounce posted over the weekend to $944.45.
Copper prices inched up 0.3% to $2.66 a pound.