Gold slips from six year peak on Sino-U.S. trade optimism

Published 2019-09-05, 07:57 a/m
© Reuters.  Gold slips from six year peak on Sino-U.S. trade optimism
XAU/USD
-
XAG/USD
-
GC
-
SI
-
PA
-
PL
-

* Platinum hits highest since February 2018

* Silver holds near three-year high touched on Wednesday

* European equities climb to fresh one-month high

By K. Sathya Narayanan

Sept 5 (Reuters) - Gold retreated on Thursday as investors booked profits after the metal rallied to a six-year peak in the previous session and hopes of a thaw in U.S.-China trade ties spurred demand for riskier assets.

Spot gold XAU= fell 0.6% to $1,542.51 per ounce as of 1143 GMT, having scaled $1,557 on Wednesday, its highest since April 2013.

U.S. gold futures GCcv1 dropped 0.6% to $1,551.30 per ounce.

"The fact that they (U.S. and China) have agreed to restart talks probably has taken a little bit of steam off gold. We saw gold touching a high at $1,557, so it bounced down slightly; could just be an element of profit taking," said Philip Newman, a director at Metals Focus.

China's Commerce Ministry said its trade team would hold talks with U.S. counterparts in mid-September in preparation for high-level negotiations in early October, while the ministry spokesman said Beijing opposed any escalation in the trade war. shares rose to a one-month high, with further support coming from a decision by British lawmakers to vote against a no-deal Brexit and the withdrawal of an extradition bill that had triggered months of protests in Hong Kong. MKTS/GLOB

However, "just because the U.S. and China have agreed to restart talks, it doesn't detract from the extent to which that dispute has escalated and deepened, adding to a sense that global growth would slow," Newman said, adding there was still tremendous uncertainty about Brexit.

Gold has jumped about 20% this year as the bruising trade war between the world's two largest economies has sparked fears of a deceleration in global economic growth and encouraged interest rate cuts by major central banks around the world.

Analysts also said the likelihood of further easing in monetary policy and negative yielding debts around the world provided support for bullion, keeping it close to its recent six-year peak.

Federal fund futures FEDWATCH imply traders see a 89% chance of a 25 basis point rate cut by the U.S. Federal Reserve this month.

Lower interest rates and Treasury yields reduce the opportunity cost of holding non-yielding bullion.

Among other precious metals, silver XAG= eased about 1.7% to $19.25 per ounce, but was near a three-year high of $19.64 it touched in the previous session.

Platinum XPT= dipped 0.9% to $976.61, having touched its highest since February 2018 earlier in the session, while palladium XPD= was up 0.1% to $1,555 per ounce, holding close to its highest in more than 1-1/2 months hit on Wednesday.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.