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.

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.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD near daily lows with mixed US data

The EUR/USD pair continues trading just above the 1.1000 level, as US Durable Goods Orders rose by 2.4%, largely surpassing the market’s expectations, although core readings plummeted in the red.

EUR/USD News

GBP/USD below 1.3000 ahead of BOE

The dollar continues to advance against all of its major rivals, getting an additional boost from upbeat CB Consumer Confidence. GBP/USD trading around 1.2980. BOE to have a monetary policy meeting this Thursday.

GBP/USD News

Bitcoin moving on the razor edge

Yesterday's positive day along the crypto board has brought the BTC/USD pair to the borderline between a bearish market and a free space where it can grow again in search of new historical highs. 

Read more

WTI bounces off lows, back above $53.00/bbl

After hitting new lows in levels last seen in early October 2019 near $52.00, prices of the WTI have managed to regains some attention and have retaken the $53.00 mark per barrel.

Oil News

USD/JPY Forecast: Consolidating at lows, bearish

Coronavirus-related fears and upcoming first-tier event keeping investors in cautious mode. US Durable Goods Orders seen posting a tepid advance in December. USD/JPY at risk of resuming its decline once below 108.65.

USD/JPY News

Forex Majors

Cryptocurrencies

Signatures