Yahoo Finance Gold Flirts With $1,500 Again on New Trade War Worries
Investing.com - What’s bad for trade is good for gold. The yellow metal found favor again with haven investors on Monday, flirting with the key bullish level of $1,500 per ounce, on news of fresh troubles in U.S.-China trade negotiations.
Gold rebounded after a Bloomberg report that China had more demands from the Trump Administration over tariffs and wanted more talks to reach a trade deal. The Chinese stance appeared to contradict the U.S. president’s contention on Friday that the two sides were closer to an agreement.
U.S. gold futures for December delivery settled up $8.90, or 0.6%, at $1,497.60 per ounce, after scaling $1,500 in intraday trade to reach a session high of $1,501.35.
Spot gold was up $3.16, or 0.2%, at $1,491.90 by 3:12 PM ET (19:12 GMT) after reaching as high as $1,497.12 in intraday trade.
“Gold prices can turn so rapidly and we’re still looking for a return to the $1,500 area on this week’s political, economic and interest rates headlines,” said George Gero, precious metals analyst at RBC Wealth Management in New York.
Gold prices initially jumped on the Bloomberg report that China wants more talks to hammer out the details of the “phase one” trade deal touted by President Donald Trump on Friday.
Beijing may send a delegation led by Vice Premier Liu He, China’s top negotiator, to finalize a written deal that could be signed by the presidents at the Asia-Pacific Economic Cooperation summit next month in Chile, said the report, citing people familiar with the situation. Another person said China also wanted Trump to scrap a planned tariff hike in December in addition to the hike scheduled for this week, something the administration hasn’t yet endorsed.
Gold, however, came off its highs after U.S. Treasury Secretary Steve Mnuchin reassured investors via an appearance on CNBC that Washington and Beijing have an “understanding” on the "phase one" agreement announced by Trump.
Hu Xijin, the editor of China’s English-language mouthpiece, Global Times, also tried to downplay concerns.
“Based on what I know, China-U.S. trade talks made breakthrough last week and the two sides have the strong will to reach a final deal. Initial statement of the Chinese side is moderate,” Hu wrote on Twitter. "This is China's habit. It doesn't mean China's real attitude is not positive.”
The trade war aside, the environment for haven assets continued to be supportive, with the U.K.’s prospects for a quick deal and smooth exit from the EU dashed again. The EU dismissed at the weekend the U.K.'s latest proposals for solving the Irish border issue as not clear enough.
In addition, the escalating military action in Syria, where rebel Kurds have now sought the support of Syrian President Bashing al-Assad’s forces in turning back the incursion by Turkey, has created another reason to hold safe assets like bullion.
Physical buying of gold by portfolio investors, meanwhile, continues apace. Bloomberg reported that ETFs added more than 80,000 ounces of gold to their holdings on Friday, the 20th-straight session of net buying.
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