Gold futures witnessed a muted trade on Wednesday, trading near its six-month closing low as the US dollar’s strength weighed on the precious metal.
August gold was little changed, up 10 cents at $1,260 an ounce after etching out its lowest finish since Dec. 15, according to FactSet data.
The dollar-pegged commodity has been on a persistent downtrend lately, with bullion down 0.8 percent so far this week and on pace for a monthly decline of 3.4 percent.
The most popular exchange-traded fund that tracks gold, the SPDR Gold Shares has fallen 0.9 percent so far this week and is looking at a 3.1 percent drop in June.
The skid for bullion has come even as intensifying jitters around global trade and the potential for clashes between the US and its partners in China and the European Union, have elevated worries that tit-for-tat import duties will devolve into an all-out trade war, disrupting international economies.
Global stocks have been driven down, with the Dow Jones Industrial Average (DJIA), on pace for a 0.5 percent decline in June and a 1.2 percent tumble through Tuesday’s close.
The S&P 500 index (SPX) is holding on to a 0.7 percent gain but has slipped 1.2 percent for the week.
Futures for both benchmarks were headed lower in early Wednesday action.
Meanwhile, China’s Shanghai Composite Index (SHCOMP) is down 2.7 percent this week and 9.1percent in June, having entered bear-market territory, defined as a decline of at least 20 percent from a recent peak.
Against that backdrop and pledges by the US Federal Reserve to raise benchmark interest rates, the dollar has experienced a steady climb. As gauged by the ICE U.S. Dollar Index, the buck has risen by 0.2 percent over the past three sessions, and is on pace for a 0.8 percent advance in June.
A stronger buck could make commodities linked to the currency comparatively more expensive to buyers using other monetary units.
“The fact that gold has tumbled to a fresh 2018 low this morning despite global trade tensions weighing on sentiment, continues to beg the question if the precious metal has lost its safe-haven appeal,” said Lukman Otunuga, research analyst at FXTM in a Wednesday morning research note.
Elsewhere in metals, September silver, the most active contract, was down four cents at $16.295 an ounce.
The contract is down 1.5 percent this week and 2.7 percent in June, so far.
