After increasing quickly due to global economic recession worries, gold prices continued to fall on Monday as US dollar got stronger alongside with increasing risk sentiment and central banks signalled more accommodative monetary policy. White House economic advisor Larry Kudlow said on Monday that there might be a preparation to set a timetable regarding trade talks with China while US President Donald Trump stated talks were going very well however he was not ready for a deal yet. In the meantime, Germany Finance Minister Ola Scholz said there could be fiscal spending worth $50 billion in case of a recession however it would not be imminent. Data released on Sunday showed contraction in Japanese exports persisted in July.
Gold prices declined as risk sentiment increased due to more accommodative central banks and cooling trade tensions alongside with dollar index keeping stronger above 98 on Monday.
As of 13:20 GMT+3, spot gold was trading at $1,499.42 an ounce while dollar index was at 98.18. US 10-year Treasury yield was up to 1.618.
Phillip Futures analyst Benjamin Lu said on Reuters that yellow metal fell against stronger US dollar but it would remain supported by slowing global economy and easy monetary policy by central banks. European Central Bank and Federal Reserve are expected to cut the rates in September.
White House economic advisor Larry Kudlow said on Sunday that negotiations were going well with China while stating there might be a preparation for a timetable regarding trade talks and phone calls between two sides would continue until September. US President Donald Trump said talks were going well but underlined he was not ready to reach a deal with China yet.
In Germany, where the economy which has been hit by global economic slowdown and US-China trade dispute contracted in the Q2, Finance Minister Ola Schulz said hinted €50 billion could be spent fiscally in case of a recession but it would not be imminent. This caused worries that the timing might lag behind until politicians make fiscal easing decision.
According to data released on Sunday in Japan, Japan’s exports contracted for the 8th. consecutive month in July as manufactures’ confidence turned negative. Japan, where the economy was hit hard by US-China trade dispute, exports declined 1.6% in July while imports contracted by 1.2%. Despite this, the data was above expectations and contraction in exports was mostly due to declining exports to China. With global economic slowdown and ongoing trade tensions between the US and China, quick recovery in exports is not expected anytime soon.