After hitting a six-year high on Tuesday morning, gold prices retreated on news that the U.S. Trade Representative may delay tariffs on some Chinese imports. Among the products whose tariffs may be delayed are mobile phones and laptops, Al Jazeera reported. Gold futures were trading at $1,506.80 per ounce as of 5:11 a.m. HK/SIN after hitting a low of $1,501.22 per ounce.
Analysts don’t believe that the tariff delay will stifle gold’s climb, but that it may reduce interest in the safe-haven asset in the short-term. According to Oilprice.com, the current ‘gold rush’ is likely to continue as investors run to rid themselves of dollars. Russia and China have announced plans to hasten their ‘de-dollarization’ in light of President Trump’s sanctions. The countries have also made plans to use their native currencies for trade so that they can trade without prices being pinned to the U.S. dollar. Serbia and the Philippines have also begun to shed their U.S. dollar and to boost their gold reserves, moves which have served to boost the price of gold both in the recent past and likely in the near future. Serbia as increased its reserved to 30 tons from 20, and is aiming to reach 50 tons by the end of next year.
Still, despite signs that gold prices have more highs to reach, bearish analysts argue that the precious metal is overbought and that a short-term correction is likely before prices head higher.
Wall Street Breaks Losing Streak
Gold prices may have fallen following news about the tariff delay, but Wall Street benchmarks were boosted by the news, finally breaking their losing streak and ending the day broadly higher. The S&P 500 close dup 1.48 percent, the NASDAQ closed 1.95 percent higher, and the Dow Jones Industrial Average earned 1.44 percent on the day. A day of positive trading on Tuesday afternoon boosted optimism in Asia, sending benchmarks higher. The Nikkei 225 was up 0.76 percent, Hong Kong’s Hang Seng Index was up 0.90 percent and south Korea’s Kospi enjoyed a 1.12 percent gain in early trade.