Gold prices steadied near one-week highs on Monday amid a risk-off mood sentiment driven by an underwhelming China fiscal stimulus, while investors awaited comments from US Federal Reserve officials for hints on its interest rate outlook.
Spot gold edged lower 0.1 per cent at $2,652.31 per ounce by 1155 GMT, after hitting its highest since Oct. 4 at $2,666.72 earlier in the session. US gold futures fell 0.3 per cent to $2,669.20, reports Reuters.
China painted a picture of a Chinese economy that is stalling so it's not going according to the plan," said Ricardo Evangelista, senior analyst at ActivTrades.
"With the slowing down of China, what you see basically is a drop in risk appetite."
China's export growth slowed sharply in September while imports also unexpectedly decelerated, undershooting forecasts by big margins, while China's broad economic stimulus promises made over the weekend failed to inspire investors.
China is the world's biggest consumer of the safe-haven bullion, which tends to gain when investors sell risky assets.
Chinese data present a double-edged sword, on one hand weak Chinese data could reduce demand for gold, on the other a broader slowdown in China could unsettle markets, enhancing the appeal of gold as a safe haven, Zain Vawda, market analyst at MarketPulse by OANDA, said. "Overall, there are still more factors supporting higher gold prices than those weighing against it."
Traders are now looking out for comments from Fed officials this week for more clues on future interest rate cuts, along with US retail sales data. Investors see about 88 per cent chance of the Fed cutting rates by 25 basis points in November, as per the CME FedWatch tool. Lower borrowing rates boost the appeal of holding gold, which yields no interest.
Spot silver fell 1.3 per cent to $31.13 per ounce and platinum shed 0.7 per cent to $978.20. Palladium fell 1.7 per cent to $1,050.65.
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