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Gold hovers above $1,500 as US-China trade hopes fade

Gold hovers above $1,500 as US-China trade hopes fade

Mubasher: Gold prices on Wednesday maintained the preceding session’s gains, as hopes for a resolution in the trade conflict between the US and China faded, weighing on risk-taking sentiment, according to Reuters.

This came in the middle of anticipations for clues on monetary easing by the US Federal Reserve.

By 10:30 am GMT, spot gold traded lower at $1,502.29 per ounce, after rising earlier to $1,510.50 per ounce, while US gold futures climbed to $1,507.40 per ounce.

Gold was still trading above $1,500, having climbed as much as 1% on Tuesday.

“The market is holding back, and looking at what’s going to happen in the US-China trade talks on Thursday,” Phillip Futures analyst Benjamin Lu was quoted by Reuters.

The US on late Tuesday imposed visa bans on Chinese officials in response to the mass detention of predominantly-Muslim ethnic minorities in Xinjiang province, upping the ante with Beijing ahead of the top-level trade negotiations  due to kick off on Thursday and Friday.

This was preceded by the US Commerce Department’s decision to include 28 security bureaus and firms into the so-called “Entity List” over Beijing’s treatment of the ethnic minority groups.

US President Donald Trump said that tariffs on Chinese imports will be raised on mid-October if the trade talks in Washington fail to yield progress.

The US Treasury yield curve steepened in Asia after Federal Reserve Chair Jerome Powell hinted further interest rate cuts and the resumption of bond purchase programme to handle a recent surge in money market rates.