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.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
AUD/USD could extend the recovery to 0.6500 and above
The enhanced risk appetite and the weakening of the Greenback enabled AUD/USD to build on the promising start to the week and trade closer to the key barrier at 0.6500 the figure ahead of key inflation figures in Australia.
EUR/USD now refocuses on the 200-day SMA
EUR/USD extended its positive momentum and rose above the 1.0700 yardstick, driven by the intense PMI-led retracement in the US Dollar as well as a prevailing risk-friendly environment in the FX universe.
Gold struggles around $2,325 despite broad US Dollar’s weakness
Gold reversed its direction and rose to the $2,320 area, erasing a large portion of its daily losses in the process. The benchmark 10-year US Treasury bond yield stays in the red below 4.6% following the weak US PMI data and supports XAU/USD.
Bitcoin price makes run for previous cycle highs as Morgan Stanley pushes BTC ETF exposure
Bitcoin (BTC) price strength continues to grow, three days after the fourth halving. Optimism continues to abound in the market as Bitcoiners envision a reclamation of previous cycle highs.
US versus the Eurozone: Inflation divergence causes monetary desynchronization
Historically there is a very close correlation between changes in US Treasury yields and German Bund yields. This is relevant at the current juncture, considering that the recent hawkish twist in the tone of the Federal Reserve might continue to push US long-term interest rates higher and put upward pressure on bond yields in the Eurozone.