Gold declines as investors await U.S. stimulus talks
Gold prices declined to a 1-week low as the dollar firmed after Beijing imposed sanctions on U.S. officials in the latest flare-up in tensions between Washington and Beijing, with investors also keeping a close watch on negotiations over a U.S. stimulus plan.
Spot gold was trading 1.7 percent lower to $1,994.22 per ounce by 0914 GMT, drifting further away from a record high of $2,075.28 hit last week. U.S. gold futures slumped 1.3 percent to $2,003.65.
The dollar index rose to a 1-week high against its rivals as relations between Washington and Beijing worsened over Hong Kong.
China imposed sanctions on 11 U.S. citizens, including lawmakers from President Donald Trump’s Republican Party, after Washington’s sanctions on Hong Kong and Chinese officials last week.
U.S. Treasury Secretary Steven Mnuchin said companies from China and other countries that do not comply with accounting standards will be delisted from U.S. stock exchanges as of the end of 2021.
Meanwhile, U.S. congressional leaders and Trump administration officials said they were set to resume negotiations on a coronavirus aid deal, although it was unclear whether Democrats and Republicans would be able to resolve their differences.
The U.S. economy outlook has become even more uncertain as the virus spread across the country, fuelling expectations the Federal Reserve will shift to even more aggressive policy settings in September.
The greenback against a basket of currencies traded 0.3 percent down at 93.34, having touched a high of 93.72 earlier, its highest since August 4. The U.S. Treasury yields surged, with the benchmark 10-year note yield trading at 0.597 percent.
Investors now await meeting between top U.S. and Chinese trade officials on Saturday to review the first six months of the Phase 1 trade deal.