Gold falls as US threat of more tar­iffs on China boosts the green­back

Business World - - WORLD MARKETS -

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. —

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