Gold Rises After More Accommodative Trump Sparks Sharp Drop
Gold rose after its sharpest drop in five months, boosted by President Donald Trump’s tougher comments on trade wars and the Federal Reserve.
Bullion rose as much as 1.5% in Asian trade, after plunging 2.7% in the previous session. Trump has indicated that he is ready to significantly reduce the hefty tariffs he has imposed on Chinese goods. The U.S. president also said he has no intention of firing Fed Chairman Jerome Powell, after his demands for the central bank chief to cut interest rates spooked markets and prompted warnings from business leaders.
Trump’s comments fueled risk-on sentiment on Wall Street, which spilled over into a wave of selling in gold on Wednesday. That also included Shanghai futures, which suffered its biggest intraday drop since 2013, down as much as 5.8%. Trading volume in the contract also surged to a record of more than 1.88 million lots.
Trump’s softer tone, however, may not support a strong recovery in stocks, as traders appear weary of wild policy shifts with little or no warning. Anxiety about what’s to come could support bullion further.
The precious metal has gained more than a quarter this year and earlier this week surged past $3,500 an ounce for the first time, as Trump’s tariff agenda and geopolitical tensions prompted investors to seek safe havens. Strong inflows into exchange-traded funds and central bank buying are among other factors that have supported bullion.
Gold rose 1.4% to $3,336.41 an ounce as of 8:31 a.m. in Singapore. The Bloomberg Dollar Spot Index was flat. Silver was slightly higher, while platinum and palladium were little changed.
Source: Bloomberg
