London: Gold prices slipped on Monday from a more than one-week high hit in the previous session as strong data from China and the United States buoyed stock markets, denting the appeal of bullion.
Spot gold was down 0.3 per cent to $1,282.26 per ounce at 1007 GMT. US gold futures shed 0.3 per cent to $1,284.50 an ounce.
Global shares rose, supported by data showing profits at Chinese industrial firms grew for the first time in four months and a strong reading of US first quarter growth data last week.
“Since quite some time it’s been a risk friendly market, with equities on the rise. Gold prices are also trading below a very important level of $1,300, which is weighing on the market,” Commerzbank analyst Eugen Weinberg said.
The recent uplift in equities has led investors cut their exposure to gold, with holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, falling to its lowest since October 19 at 746.69 tonnes on Friday.
Holdings have fallen by over 3 per cent since the beginning of this month.
Hedge funds and money managers also increased their bearish wagers on COMEX gold in the week to April 23, the US Commodity Futures Trading Commission (CFTC) said on Friday.
“We remain in a very uncertain period for gold though. On the one hand, the environment is primed for gold to come under more pressure, but when we broke through $1,280 two weeks ago, any downside momentum quickly faded,” OANDA senior market analyst Craig Erlam said.
Gold on Friday rose to its highest since April 16 at $1,288.59 and also posted its biggest weekly percentage gain in five weeks.
“We saw a nice pop higher at the end of last week as the dollar softened a little on the back of the GDP data. The headline number was strong — and much better than expected — but the underlying figures are less impressive,” Erlam said.
The US GDP data instigated questions about the actual economic strength of the country, since the quarterly growth figures were largely driven by temporary factors like a smaller trade deficit and the largest accumulation of unsold merchandise since 2015.
Data showed the core personal consumption expenditure price index figure, the Fed’s preferred metric of inflation, increased at a rate of only 1.3 per cent versus 1.8 per cent in the prior quarter.
Investors are now looking ahead to the Federal Reserve policy meeting and a raft of global data including on US core inflation and payrolls this week.
Elsewhere, silver fell 0.5 per cent to $14.99 per ounce, while platinum gained 0.1 per cent to $895.25.
Palladium was down 0.1 per cent at $1,463.51, having climbed to its highest in a month at $1,466.42 earlier in the session.