Gold settles with a loss as U.S., China attempt to steer down trade tensions

  • Written by MarketWatch
  • Published in Economics

Gold prices settled with a loss on Monday, giving up earlier gains, as President Donald Trump and Chinese officials both appeared to play down the recent escalation in trade tensions.

Gold for December delivery GCZ19, +0.10%[1]  on Comex edged down by 40 cents, or 0.03%, to settle at $1,537.20 an ounce, after tapping an intraday high of $1,565. The decline follows a 1.9% climb on Friday to a more than six year high of $1,537.60. September silver SIU19, +1.36%[2], meanwhile, held on to much of its earlier gains, settling 22.8 cents, or 1.3%, higher at $17.641 an ounce after tacking on 2.2% Friday.

Adding some pressure to dollar-denominated gold prices, the benchmark ICE U.S. Dollar Index DXY, +0.38%[3]  moved up by 0.4% in Monday dealings, trading above 98 as gold futures settled.

Gold rose Friday after China announced it was imposing retaliatory tariffs on $75 billion in U.S. imports, drawing an angry response from President Donald Trump, who said he was ordering U.S. companies to look for alternative to China. After markets closed Friday, Trump announced the U.S. would further raise tariffs on imports from China.

But early Monday, Trump, speaking on the sidelines of the Group of Seven meeting in France, said U.S. officials had received calls from Chinese negotiators and that the two sides would return to the table[4]. However, the spokesman for the Chinese Foreign Ministry, Geng Shuang, said he was “not aware of” such a phone call by China to the U.S., according to The Wall Street Journal[5].

Still, China’s top trade negotiator, Vice Premier Liu He, on Monday said that Beijing hopes to resolve the trade war through “calm” negotiations[6] and isn’t seeking to escalate tensions, according to Reuters.

Analysts said worries around trade and its impact on global growth and sentiment were unlikely to be easily dispelled barring a breakthrough in negotiations. Meanwhile, the yellow metal was likely to continue to gain support on any renewed signs of rising tensions.

“Gold is profiting not only from the escalation of the trade dispute itself, but also from the resulting weak stock markets and falling bond yields. It is truly living up to its status as a safe haven,” said Daniel Briesemann, analyst at Commerzbank, in a note. Gold futures have climbed by nearly 7% month to date.

Trump’s repeated criticism of Fed Chairman Jerome Powell, who he described as an “enemy” alongside Chinese leader Xi Jinping on Friday,...

Read more from our friends at MarketWatch

71°F

Philadelphia

Cloudy

Humidity: 80%

Wind: 8.70 m/h

  • 26 Sep 2020 73°F 63°F
  • 27 Sep 2020 77°F 64°F