Gold traded at roughly one-week peak Wednesday as jitters around China-U.S. trade negotiations continued to nag markets perceived as riskier this week, sending investors into havens that include precious metals and the Japanese yen.
“Gold is once again challenging resistance between $1,289 and $1,292 an ounce,” said Ole Hansen, head of commodity strategy with Saxo. “The combination of weaker stocks, rising volatility and a softer dollar — especially against the yen — have triggered renewed demand. This comes as uncertainty about what happens next in the trade talks between China and the U.S. rumbles on.”
Gold for June delivery GCM9, +0.37% was up $4.40, or 0.3%, at $1,290 an ounce, trying for its fourth straight session gain and up 0.6% for the week so far.
Read: Why gold’s a ‘bargain’ at less than $1,300 an ounce
Silver for July delivery SIN9, -0.01% was up a cent, or 0.1%, at $14.945 an ounce.
Among ETFs, SPDR Gold Shares GLD, +0.33% was up 0.4%, while the iShares Silver Trust SLV, +0.00% was flat. The VanEck Vectors Gold Miners ETF GDX, +2.02% rose 1.7%.
Stocks declined sharply again on Tuesday and futures early Wednesday pointed to more losses, with attention still fixed on trade talks.
U.S. Trade Representative Robert Lighthizer said earlier this week that the Trump administration will increase tariffs on $200 billion in Chinese goods early Friday absent more agreement on outstanding matters. The prospect of higher tariffs had been first raised on Sunday by President Donald Trump, who said China backtracked, rattling investors who had anticipated that better progress toward a near-term resolution was at hand. Chinese Vice Premier Liu He will visit the U.S. Thursday to participate in the trade talks.
The dollar, as measured by the ICE U.S. Dollar Index DXY, -0.01% was little changed at 97.56. Dollar-yen USDJPY, -0.15% was down 0.2% at ¥110.02.
Gold’s gains have been subdued, analysts note, as it competes with bonds TMUBMUSD10Y, -1.20% and the yen for haven flows, and in part as the dollar has held up relatively well against most currencies. A richer dollar can erode demand for gold priced in the currency by investors using other monetary units. Gold came under pressure last week and the dollar gained when the Federal Reserve tossed cold water on expectations an interest-rate cut could materialize later this year.
“Downside risks to growth from higher tariffs and the potential for equity weakness and lower yields should support gold. But potential upside to the dollar would likely act as a headwind to gold,” UBS analysts said in a research note, adding that Chinese demand for physical gold is lower right now.
Rounding out metals trading, July copper HGN9, -0.63% fell 0.4% to $2.774 a pound. If a trade deal is indeed on the ropes that could also mean difficulties for China’s economy, and the country accounts for a bulk of demand for the industrial metal.
Elsewhere, July platinum PLN9, -0.39% fell 0.5% to $869.10 an ounce, while June palladium PAM9, -0.57% shed 1% to $1,309 an ounce.
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