Metals Stocks: Gold under pressure as investors await U.S.-China trade talks

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Gold skittered lower Monday morning, on pace to notch its first back-to-back declines of the early month, as investors watched developments in Sino-American trade talks.

December gold GCZ19, -0.58% on Comex fell $7.80, or 0.5%, to $1,505.10 an ounce, following a weekly rise of 0.4% for the most-active contracts, according to FactSet data.

December silver SIZ19, -0.40%  shed 9 cents, or 0.5%, to $17.545 an ounce, after booking a nearly 0.2% decline for the week.

U.S. and Chinese officials, including Vice Premier Liu He, are expected to resume trade discussions on Oct. 10-11. However, reports over the weekend indicate that Beijing delegates may be aiming to offer a narrower trade resolution than the Trump administration is hoping.

U.S. stock-index futures were edging lower after a powerful rally on Friday, at least partly prompted by the view that the Labor Department’s employment report isn’t weak enough to suggest that an economic recession is in the offing and may even support another rate cut by the Fed.

Gold’s performance has been mixed. It has settled higher in four of the past five sessions but the metal ended September with successive losses, including a 2.2% drop that took it sharply below the psychologically important $1,500 level.

Against that backdrop, some strategists believe that moves in the precious metal will be driven by news on tariffs and policy updates from global central bankers, which have mostly adopted a regime of easy-money stimulus measures.

“Gold’s bullish trend will likely be supported on fresh stimulus bets from global central banks and optimism that we will not see a broader trade deal this week, just a de-escalation in tariff threats and possibly an extended trade truce,” wrote Edward Moya, senior market analyst at brokerage Oanda, in a daily research note.

“Trade jitters are likely to remain for the foreseeable future and that should help keep gold rising higher,” he wrote.

On Friday, gold and silver retreated after the U.S. unemployment rate dropped to 3.5%, the lowest rate since December 1969, even as the headline reading, 136,000 jobs created in nonfarm payrolls in September fell below economists’ expectations.

The report was seen giving the rate-setting Federal Open Market Committee cover to proceed with a quarter percentage point interest-rate cut at the end of October, which would ultimately be bullish for gold.