Mubasher: Gold prices declined earlier on Wednesday after the US delayed the implementation of the tariffs on some Chinese imports, according to Reuters.
Nevertheless, losses for the safe-haven metal were capped by looming political uncertainties and worries over global economic growth.
By 7:16 am GMT, spot gold fell by 0.1% to $1,499.89 per ounce, US gold futures dropped by 0.2% to $1,510.80 per ounce.
However, by 11:41 am GMT, spot gold climbed by 0.99% to $1,516.34 per ounce, while gold futures rose by 0.6% to $1,523.40 per ounce.
“Easing in trade tensions, geopolitical risks have provided some sort of hope in the markets which boosted equities, because of this there is a brief pullback in gold prices,” National Australia Bank (NAB) economist John Sharma was quoted by Reuters.
The US administration on Tuesday decided to delay tariffs on some Chinese imports, including mobile phones, laptops and other consumer goods.
Financial markets heaved a sigh of relief on the thaw in the trade tensions between the world’s top two economies, with Asian shares climbing along with a global rally in equities on Wednesday.
“China said it would hold trade talks by phone in two weeks, and the US saying it will delay some of the tariffs have driven a wave of profit-taking across safe-haven assets,” a note by VM Markets managing partner Stephen Innes was quoted by the news agency.
However, global economic concerns remained, with data showing China’s industrial output growing at the slowest pace since 17 years, as the US stepped up pressure in July.
Market focus turned to the US Federal Reserve’s annual symposium next week, looking for hints on the future path of interest rates, while traders see an 86.2% chance of a quarter-point cut by the US central bank this September.
Lower interest rates are usually a bearish factor for the dollar, while they tend to support gold, as they reduce the opportunity cost of holding the non-yielding bullion, making the yellow metal cheaper for non-US currency holders.
By 11:45 am GMT, the dollar index, a tracker of the US currency against six major peers, inched down by 0.10% to 97.71.