Gold price firms as US-China trade deal details fail to allay uncertainty

GOLD rose on Wednesday as details of the US-China Phase 1 trade deal failed to soothe investors’ concerns about trade differences, as Washington retained tariffs on some Chinese goods.

In other precious metals, palladium climbed to a record high and platinum surged to its highest in nearly two years.

US and China signed the interim trade deal that will roll back some tariffs and boost Chinese purchases of US goods and services.

The deal will, however, leave in place 25% tariffs on a $250 billion array of Chinese industrial goods and components used by US manufacturers.

Spot gold rose 0.7% to $1,557.02 per ounce at 2:36 p.m.

EST (1936 GMT). US gold futures settled up 0.6% at $1,554.

“There are expectations that trade concerns are going to continue to linger as we are not going to see a complete rollback on tariffs,” said Edward Moya, a senior market analyst at OANDA.

“The risks will keep gold prices supported here in the short term and we might see prices target $1,580 in the next few weeks, but right now $1,540 should hold.”

Focus will now shift to the Phase 2 deal. This is likely to focus on technology and cybersecurity issues, US Treasury Secretary Steven Mnuchin said, which has long been a sore point between the two giant economies.

Key world stock market indexes climbed to new records, while the US dollar weakened against a basket of key rivals.

Platinum climbed 3.7% to $1,019.20, having risen to its highest since January 2018 at $1,024.80 an ounce.

“Platinum is being largely driven by technical moves as we broke through the highs established in September 2019, forcing some shorts to cover,” said Daniel

Ghali, commodity strategist at TD Securities.

The market may be driven into a deficit this year after a long time; and power outages in South Africa might translate into a lower supply growth, which could help platinum prices to rally, Mr. Ghali added.

Silver rose 1.3% to $18.02 per ounce. —