Gold prices inched higher on Monday as hopes of a swift Brexit deal boosted the sterling and the euro against the dollar, making bullion cheaper for buyers in Britain and the euro zone. Michel Barnier, the European Union's chief negotiator, said an agreement on Britain's exit from the bloc was "realistic in six to eight weeks."
Spot gold gained 0.1 percent at $1,195.91 per ounce by 1:41 p.m. EDT (1741 GMT), while US gold futures December delivery settled down 60 cents, or 0.1 percent, at $1,199.80 per ounce. Gold has tumbled more than 12 percent from a high of $1,365.23 in April as trade disputes, weak emerging market currencies and rising US interest rates have driven a dollar rally.
Gold prices briefly dipped on Monday as investors sought safety in the dollar on trade tensions, said Walter Pehowich, executive vice president of investment services at Dillon Gage Metals. Speculators have ramped up bets on lower prices, with their net short position in Comex gold the biggest since the data were first compiled in 2006.
Until spot gold prices hold above the $1,220-$1,235 range, they would not rise, said Tyler Richey, co-editor of the Sevens Report. Holdings of gold-backed exchange-traded funds are down almost 5 million ounces, or 8.6 percent, from a May high.
"If we get some sort of favorable resolution or at the very least a solid step forward in trade negotiations, that could help initiate that dollar pullback," supporting gold, Richey added. Among other precious metals, spot silver was up 0.5 percent at $14.17 per ounce, while platinum rose 0.6 percent at $783.49 and palladium lost 0.3 percent at $977.50.
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