Gold prices held steady in a narrow range on Monday as worries over U.S. corporate earnings and a slowdown in global economic growth weighed on Asian shares.
Spot gold was flat at $1,233.09 an ounce at 0417 GMT, with prices moving in a range of $4. On Friday, it touched its highest since July 17 at $1,243.32. U.S. gold futures were little changed at $1,235.40 an ounce.
“There are two camps diverging around the likely performance of the stock market, particularly in the short-term which is creating a push and pull for the gold market where we have seen some interest return on the back of those losses,” ANZ analyst Daniel Hynes said.
“But the flow hasn’t been completely one-way and there is still some caution around the sell-off being potentially short-lived. And that has resulted in investors not fully switching out of equity markets into gold.”
Asian shares barely managed to hold firm on Monday, with U.S. stock futures turning down and Chinese markets deep in the red on fresh signs of cooling in the world’s second-biggest economy.
“Much of what will transpire in gold over the course of the coming week will ride on the tone of the U.S. stock market,” INTL FCStone analyst Edward Meir said in a note.
“Obviously, if the decline continues, gold should likely work higher, but the strength in the dollar is somewhat surprising and seems to be capping a more robust rally.”
Gold prices have gained more than 6 percent after declining to $1,159.96 an ounce in mid-August, the lowest since January 2017.
However, the yellow metal has declined nearly 10 percent from its April peak after investors preferred the dollar as the U.S.-China trade war unfolded against a background of higher U.S. interest rates.
The dollar on Monday held firm against a basket of its key rivals.
Gold prices are likely to remain range-bound ahead of next week’s mid-term election in the United States and the U.S. non-farm payroll data due later this week, said Ronald Leung, chief dealer, Lee Cheong Gold Dealers, Hong Kong.
Spot gold faces a strong resistance at $1,238 per ounce and it may either hover below this level or retrace towards a support at $1,217, according to Reuters technical analyst Wang Tao.
Hedge funds and money managers cut their net short position in Comex gold by 10,473 contracts to 26,899 contracts in the week to Oct. 23, the smallest net short position since mid-July, data showed.
Among other precious metals, palladium was down 0.3 percent at $1,101.0 an ounce.
Silver was up 0.4 percent at $14.67 per ounce, while platinum was 0.1 percent lower at $828.95 an ounce.