Gold futures traded slightly lower Monday, losing ground as equities drifted into positive territory and investors appeared to play down U.S.-China tensions and a weekend of civil unrest in several U.S. cities.
Gold for August delivery on Comex fell $6.50, or 0.4%, to $1,745.10 an ounce, while July silver was up 14.10 cents, or 0.8%, at $18.64 an ounce.
”Investors are continuing to largely ignore the escalating U.S.-China tensions, the global recession and ongoing riots in the U.S., among other risks. Sentiment remains supported due to the easing of lockdown measures and because of ongoing central bank support,” said Fawad Razaqzada, market analyst at ThinkMarkets, in a note.
Stocks were buoyed late Friday after President Donald Trump took actions aimed at punishing China for moving to impose new security laws that would undercut Hong Kong’s autonomy but stopped short of undoing the phase-one trade agreement reached earlier this year. Stock-index futures pointed to a higher start despite a report China had moved to pause purchases of U.S. soybeans.
Meanwhile, civil unrest erupted across major cities from Los Angeles to New York as anger over the death in police custody of George Floyd last Monday sparked demonstrations. A Minneapolis police officer, Derek Chauvin, was captured on video driving his knee onto Floyd’s neck until the handcuffed man lost consciousness and later died.
A weaker tone for the U.S. dollar was seen underpinning precious metals. The ICE U.S. Dollar, a gauge of the currency against a basket of six major rivals, was down 0.2%.
Silver futures on Friday posted a gain of nearly 24% for the month, the largest since 2011, with the industrial metal finding support as global economies continue to reopen from pandemic-related shutdowns.
“Silver’s rampage continued on a near uninterrupted basis throughout the month of May,” said Ryan Giannotto, director of Research at GraniteShares. “While silver is one of the more volatile metals, after a 20% monthly gain on the back of a 6% gain in April, trend exhaustion may be approaching.”
Meanwhile, gold tacked on 3.4% for the month.