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Gold retreats from 1M high on US-China trade optimism

Gold retreats from 1M high on US-China trade optimism

Mubasher: Gold prices went down on Wednesday, drawing back from their highest level since a month hit in the prior session, according to Reuters.  

The decline came as hopes surrounding trade talks between Washington and Beijing mollified investor worries, giving a push to global equities and the US dollar.

At 8:05 am GMT, spot gold stood still at $1,296.89 per ounce, while US gold futures ticked up by 0.08% to $1,297.40 per ounce.

“Gold is restrained as people are still interested in the dollar,” Hong Kong-based Wing Fung Precious Metals dealing head Peter Fung was quoted by Reuters.

The greenback stood firm in early Asian trading, after US President Donald Trump dismissed the recent escalation in the trade conflict with China as “a little squabble,” asserting that the negotiations between both sides had not failed.

The stronger the dollar gets, the more expensive gold becomes for non-US currency holders.

By 8:08 am GMT, the US dollar index, which traces the currency against a basket of six major rivals, inched down by 0.07% to 97.45

“The ongoing Sino-US trade dispute has illustrated cooling conditions as both parties expressed willingness to resolve existing trade differences,” a note by Phillip Futures analysts was quoted by Reuters.

At the same time, Asian stocks saw a cautious rally as optimism surrounding US-Sino trade development mounted, still without ruling out the prospects of a prolonged row.

 However, “the [gold] market is holding because some people bought gold especially after the Chinese government also raised tariffs on US goods,” Fung said.