Gold Prices Retreat from Six Year Highs on Trade Comments
Gold prices retreated from six-year highs hit on Monday after U.S. President Donald Trump hinted that a break in the trade war between the U.S. and China may be imminent. Though he didn’t give specifics, Trump mentioned that Chinese officials had contacted the U.S. trade officials to resume negotiations. The move came after a fresh round of tariffs was announced by both sides on Friday.
Though he’s made such comments multiple times in the past few months without any actual resolutions, his comments have once again sent ripples through the global markets. Gold futures for the precious metal were up 0.14 percent as of 2:02 p.m. HK/SIN on Tuesday, to trade at $1,539.50 per ounce, but this was still well below the six-year high of $1,555.07 on Monday. According to a report by the Australia & New Zealand Banking Group Ltd., gold buying is likely to continue in the short term as emerging markets remain uncertain. The firm pointed out that central banks have been acquiring bullion at an increasing rate of late as geopolitical tensions have increased, and that this behavior is likely to continue.
Central banks added 374.1 tons of gold in the first six months of 2019 according to data published by Yahoo! Finance, pushing demand for bullion to a three-year high.
Other Markets Also React to Trump
The global marketplace has shown significant volatility that results directly from comments related to the U.S.-Sino trade war. If negative sentiment is released, assets tend to drop quickly, while positive sentiments have prompted buying almost instantly. As a result of Trump’s comments on Monday, oil markets headed higher, with U.S. WTI futures up 0.32 percent in the early Asian afternoon to $53.82 per barrel. Brent crude futures were up 0.32 percent as well, trading at $58.89 per barrel.
Wall Street benchmarks also closed higher on Monday, with all three major indexes closing over 1 percent higher. European stock indexes are also poised for gains on the open.
- Currency Pairs