Gold prices supported by a fresh round of uncertainty about the U.S.-China trade agreement on Wednesday morning in Asia. The precious metal still hangs almost a three-week high above $1,480.
Gold Futures deals increased by 0.06% to trade at $1,485.35.
U.S. President Donald Trump recommended that the long-awaited trade agreement might have to delay until the 2020 election. This is contrary to what his Senior Advisor Kellyanne Conway just said this week that the agreement could come by then end of this year.
The United States President Trump said at the NATO event in London that he likes the idea of delaying the China deal until after the election. Contrarily, China wants to make a deal now, and they will have to see whether or not the agreement’s going to be right, which needs to be right.
The mixed signals from the White House built uncertainty regarding global economic prospects. It increased gold prices as widely seen as a safe-haven asset.
U.S. Commerce Secretary Wilson Ross also said if no significant progress is made soon, another round of duties on Chinese imports will take effect on Dec. 15. This includes cellular phones, toys, and laptops.
A precious metal strategist said gold appeared to benefit from President Trump’s remarks on Monday. He will implement tariffs for all aluminum and steel imports from Argentina and Brazil.
Gold Prices Hits 4-Week High as Trump Turns Tables on China
President Trump might have read the minds of his Chinese negotiators as he pushed a trade agreement with Beijing in 2020. It sent gold to four-week highs as risk-averse shareholders scoot for a hedge.
Gold futures for February delivery on COMEX increased $15.20, or 1%, at $1,484.40 per ounce. It earlier strikes a high of $1,487.65, its highest peak level since Nov. 7.
Spot gold surged up to $15.43, or 1.1%, at $1,477.77. Spot gold tracks live trades in bullion. Its intraday high was $1,481.90, also the highest level since Nov. 7.
Eric Scoles of RJO Futures in Chicago said gold made substantial boosts after Trump’s comment that there is no due date on the trade agreement. Also, it may have to offset until after the 2020 election.
U.S. President Trump stated during the NATO meeting in London that it is okay for him heading into the 2020 election with the Sino-U.S. trade war unsettled.
Moreover, Trump said he has no deadline and that he likes the idea of delaying the China deal until after the 2020 election.
The U.S. Commerce Secretary said delaying the talks with China beyond 2020 may bereave Beijing of the advantage it squeezes for a settlement in its favor before the election.
China’s latest stance on Trump has not yet crashed the stock market. Thus, he warned that the increase in gold could be brief.
Scoles said despite strong negative headlines, U.S. equities still rejected the lows and are holding support. He suggests that anxiety levels are not running too high. Therefore, gold prices come off their peaks and rest just below a resistance point.
There will possibly be some follow-through in tomorrow’s trading session. The administration may not see a severe rally as the conversation on trade can shift at any point.