Investing.com - Metals prices made a positive start to the week Monday, helped by a weaker dollar, but data showed traders increased their downside bets on gold on expectations for further increases in U.S. interest rates.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose by $0.10, or 0.01%, to $1,200.50 a troy ounce.
The dollar's slump to near-intraday lows failed to inject a meaningful rise in investor appetite to increase exposure to gold as the recent round of positive U.S. economic data, including the mostly bullish jobs report Friday, has reassured investors the economy remains on solid footing, strengthening the prospect of further rate hikes.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell 0.29% to 95.10.
In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds.
Gold prices posted a second week of losses in a row on Friday, despite the United States threating to impose another round of tariffs on China. Gold's safe-haven status has come unstuck in recent months, as investors have seemingly preferred to back the greenback on expectations that in a full-blown global trade war, the strength of the U.S. economy will prevail.
U.S. President Donald Trump signalled a willingness to slap additional tariffs on Beijing "very soon," warning of another $267 billion ready to go on short notice.
CFTC COT data showed money managers increased their net short positions in gold futures to 13,500 lots from 3,100 lots for the week ended Sept. 7.
The wider metals market was mostly higher as copper attempted to hold gains, while zinc prices fell heavily.
Copper prices rose 0.13% to $2.63, while zinc prices dropped 1.33% to 2,371.75.
Aluminium prices rose 0.93% to 2,079.50 and nickel futures rose 0.61% to 12,407.50.
Silver futures gained on 0.28% to $14.21 a troy ounce, while platinum futures added 0.7% to $785.90.