Gold Prices Inch Higher as Stock Indexes Snap Winning Streak

Sari Holtz

Gold pricesThese days it seems like sentiments relating to the U.S.-Sino trade war have the ability to push markets one way or another as the wind blows. After two days of generous gains in the global stock markets, global benchmarks are heading lower, and traders are once again focusing on safe-haven assets. Gold prices, which slumped more than 1 percent during Tuesday’s New York trading session, inched up slightly by the early afternoon in Asia. Gold futures were up 0.22 percent as of 1:34 p.m. HK/SIN, to $1,486.60 per ounce. The U.S. dollar, which strengthened significantly in recent trading sessions, eased slightly on Wednesday, with the dollar index down 0.06 percent to 97.92. As the dollar firms, the price of gold becomes more expensive, which was evidenced by the slide on Tuesday. The prices of both the dollar and gold have been heavily correlated to the trade talks. On Wednesday, with no new reports about the progress of the talks, traders remain on edge and eager to see what will happen next.

Global stock indexes have also enjoyed gains in recent days thanks to optimism that “phase 1” of the trade talks will conclude by the end of this month. Traders were a bit warier on Wednesday, however, and Asian benchmarks were trading mixed after strong gains on Tuesday that were followed by a mixed day on Wall Street. Japan’s Nikkei 225 was up 0.16 percent and South Korea’s Kospi was up 0.17 percent on Wednesday afternoon, while Chinese benchmarks and Australia’s ASX 200 were both trading lower. Australia’s economy is highly connected to China’s economy due to the geographic proximity of the nations and their mutual codependence. 

Currency Market Movements

On Wednesday, the People’s Bank of China set the midpoint for the yuan at 7.0080 per dollar, its strongest level since April 8, according to Reuters. The on-shore yuan was at 6.9957, while the offshore yen was trading at 6.9958. The South China Morning Post reported that the yuan jumped above the psychologically-important level of 7 against the U.S. dollar on Tuesday on the reports that Washington may give in to China’s newest trade demands.

The yuan’s rise also impacted other Asian currencies, including the South Korean won, the Singapore dollar and the Taiwanese dollar, sending them all higher. 

Major currency pairs were making small movements on Wednesday afternoon.  The British pound eased 0.04 percent against the dollar to $1.2877, and the euro eased 0.03 percent to $1.1071. The U.S. dollar also strengthened against the Canadian dollar, trading up 0.06 percent to $1.316.

Sari Holtz

Sari Holtz began working at DailyForex in 2011 when she was hired to provide daily news analysis and to manage the daily content. Since then, she has continued to provide regular news items that focus on how political events impact the global economy. She also works directly with dozens of Forex brokers worldwide to ensure that they get their messages across and that traders can find the best broker for their individual needs.

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