Gold traded at roughly one-week peak Wednesday as jitters around China-U.S. trade negotiations continued to nag markets perceived as riskier this week, sending investors into havens that include precious metals and the Japanese yen.
“Gold is once again challenging resistance between $1,289 and $1,292 an ounce,” said Ole Hansen, head of commodity strategy with Saxo. “The combination of weaker stocks, rising volatility and a softer dollar — especially against the yen — have triggered renewed demand. This comes as uncertainty about what happens next in the trade talks between China and the U.S. rumbles on.”
Gold for June delivery
was up $4.40, or 0.3%, at $1,290 an ounce, trying for its fourth straight session gain and up 0.6% for the week so far.
Silver for July delivery
was up a cent, or 0.1%, at $14.945 an ounce.
Among ETFs, SPDR Gold Shares
was up 0.4%, while the iShares Silver Trust
was flat. The VanEck Vectors Gold Miners ETF
Stocks declined sharply again on Tuesday and futures early Wednesday pointed to more losses, with attention still fixed on trade talks.
U.S. Trade Representative Robert Lighthizer said earlier this week that the Trump administration will increase tariffs on $200 billion in Chinese goods early Friday absent more agreement on outstanding matters. The prospect of higher tariffs had been first raised on Sunday by President Donald Trump, who said China backtracked, rattling investors who had anticipated that better progress toward a near-term resolution was at hand. Chinese Vice Premier Liu He will visit the U.S. Thursday to participate in the trade talks.
The dollar, as measured by the ICE U.S. Dollar Index
was little changed at 97.56. Dollar-yen
was down 0.2% at ¥110.02.
Gold’s gains have been subdued, analysts note, as it competes with bonds
and the yen for haven flows, and in part as the dollar has held up relatively well against most currencies. A richer dollar can erode demand for gold priced in the currency by investors using other monetary units. Gold came under pressure last week and the dollar gained when the Federal Reserve tossed cold water on expectations an interest-rate cut could materialize later this year.
“Downside risks to growth from higher tariffs and the potential for equity weakness and lower yields should support gold. But potential upside to the dollar would likely act as a headwind to gold,” UBS analysts said in a research note, adding that Chinese demand for physical gold is lower right now.
Rounding out metals trading, July copper
fell 0.4% to $2.774 a pound. If a trade deal is indeed on the ropes that could also mean difficulties for China’s economy, and the country accounts for a bulk of demand for the industrial metal.
Elsewhere, July platinum
fell 0.5% to $869.10 an ounce, while June palladium
shed 1% to $1,309 an ounce.
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