Gold edges lower amid firm dollar

BENGALURU, June 25 (Reuters): Gold prices edged lower on Monday, pressured by a strong US dollar amid prospects of higher interest rates, while global trade tensions kept the metal buoyed above a six-month low hit last week.

Spot gold was 0.1 per cent lower at $1,267.23 an ounce as of 0432 GMT, while US gold futures were down 0.2 per cent at $1,268.80 per ounce.

"There are specific factors that will actually push the dollar higher, given the trade tensions as well as the booming US economy versus other economies," said OCBC analyst Barnabas Gan.

"Gold prices are very much influenced by the dollar movement rather than anything else. It's less of a safe-haven demand into gold but rather a reaction to USD strength."

US President Donald Trump on Friday threatened to escalate a trade war with Europe by imposing a 20 per cent tariff on all imports of European Union-assembled cars.

Trump also plans to bar many Chinese companies from investing in US technology firms and block additional technology exports to Beijing, Wall Street Journal reported on Sunday.

Asian shares fell on the escalating global trade tensions, while the dollar index against a basket of six major currencies stood at 94.525, having hit its highest since July 2017, at 95.529, late last week.

Gold usually gains from political and economic tensions, but has struggled this time around as the dollar has risen strongly, making the dollar-priced metal costlier for non-US investors.