Gold firms as US-China trade deal details fail to allay uncertainty
|Gold rose on Wednesday as details of the U.S.-China Phase 1 trade deal failed to soothe investors’ concerns about trade differences, as Washington retained tariffs on some Chinese goods.
In other precious metals, palladium climbed to a record high and platinum surged to its highest in nearly two years.
The United States and China signed the interim trade deal that will roll back some tariffs and boost Chinese purchases of U.S. goods and services.
The deal will, however, leave in place 25% tariffs on a $250 billion array of Chinese industrial goods and components used by U.S. manufacturers.
Spot gold rose 0.7% to $1,557.02 per ounce. U.S. gold futures settled up 0.6% at $1,554.
“There are expectations that trade concerns are going to continue to linger as we are not going to see a complete rollback on tariffs,” said Edward Moya, a senior market analyst at OANDA.
“The risks will keep gold prices supported here in the short term and we might see prices target $1,580 in the next few weeks, but right now $1,540 should hold.”
Focus will now shift to the Phase 2 deal. This is likely to focus on technology and cybersecurity issues, U.S. Treasury Secretary Steven Mnuchin said, which has long been a sore point between the two giant economies.
Key world stock market indexes climbed to new records, while the U.S. dollar weakened against a basket of key rivals.
Platinum climbed 3.7% to $1,019.20, having risen to its highest since January 2018 at $1,024.80 an ounce.
“Platinum is being largely driven by technical moves as we broke through the highs established in September 2019, forcing some shorts to cover,” said Daniel Ghali, commodity strategist at TD Securities.
The market may be driven into a deficit this year after a long time; and power outages in South Africa might translate into a lower supply growth, which could help platinum prices to rally, Ghali added.
The auto-catalyst palladium notched a record high of $2,261.45 an ounce earlier in the session, and was last up 2.8% at $2,256.13, bolstered by a prolonged supply deficit.
Silver rose 1.3% to $18.02 per ounce.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.