Gold falls as US threat of more tariffs on China boosts the greenback
NEW YORK/LONDON — Gold prices slipped on Wednesday as US threat of tariffs on an additional $200 billion of Chinese goods pushed safe-haven flows to the US dollar and dashed hopes that Washington would eventually step back from the escalating row.
US President Donald Trump detailed overnight a list of Chinese products that could face 10% tariffs. The clock now starts ticking on a two-month period of public comment before the levies are imposed.
The news sent the US dollar to an 11- month high versus the yuan and hit the Australian dollar, but left the euro largely unmoved.
A strong greenback makes US dollar- priced gold costlier for non-American investors.
“Gold is feeling the pressure from commodities across the board and the firmer dollar,” said David Meger, director of metals trading at High Ridge Futures in Chicago.”
Spot gold gained 0.90% at $1,243.57 per ounce by 1:34 p.m. EDT (1734 GMT), earlier sinking to an eight-day low of $1,242.55.
US gold futures for August delivery settled down $ 11, or 0.90%, at $1,244.40 per ounce.
“Gold options keep getting higher and higher, which means people are positioned for prices to rise. It tells us there is overhanging positive sentiment to gold but right now the money is sitting on the sidelines,” ING analyst Oliver Nugent said.
The news of more possible US tariffs on China is the latest in a tit-for-tat spat between the world’s two largest economies.
Spot gold may break support at $1,247 per ounce and fall more towards the next support at $1,237 as it has completed a bounce from the July 3 low of $1,237.32, Reuters technicals analyst Wang Tao said.
“When trade war risk escalates, investors run for cover ... I always have gold as a hedge but it’s been more challenging to have this view when the US dollar is attracting haven flows,” said Stephen Innes, APAC trading head at OANDA.
Silver shed 1.4% at $15.82 an ounce, while platinum dropped 1.4% at $ 830.60. Earlier in the session, both metals fell to their lowest since July 3.
Palladium lost 0.20% at $939.50 per ounce, after falling to a two-week low at $931.40. —