Gold plummets below $1,500 on renewed trade optimism
- USTR in a statement announced a delay to additional tariffs on some Chinese imports.
- Wall Street posts strong gains on improved risk sentiment.
- 10-year US Treasury bond yield reverses early losses, up more than 2.5%.
The XAU/USD pair, which capitalized on the risk-off flows and rose to its highest level in more than six years at $1,535, earlier today, came under strong bearish pressure in the last hour and slumped below the critical $1,500 handle as the latest headlines surrounding the US-China trade dispute revived hopes of sides making progress toward an agreement. As of writing, the pair was down around 1% on the day at $1,496.
US delays tariffs on some Chinese products
The United States Trade Representative's office published a statement on Tuesday announcing the Trump administration's decision to delay additional tariffs on some Chinese imports until December 15. Wall Street's main indexes rose sharply on these remarks and the 10-year US Treasury Bond yield erased early gains and was last adding more than 2.5% on the day to reflect the shift in the market sentiment.
According to the USTR's statement, some of the products whose tariffs will be delayed include "computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing,"
The Greenback also capitalized on rising Treasury bond yields, lifting the US Dollar Index to its highest level in a week near 97.80 and putting additional weight on the pair's shoulders.
During the Asian session on Wednesday, Retail Sales and Industrial Production data from China will be looked upon for fresh impetus.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
