Gold slips more than 1% as China considers US tariff exemption
Gold prices lost more than 1% on Friday and were heading for a weekly fall on signals of a potential de-escalation in the U.S.-China trade war, including news that China was weighing tariff exemptions for some U.S. goods.
Spot gold fell 1.5% to $3,299.69 an ounce as of 0830 GMT. U.S. gold futures shed 1.1% to $3,310.20.
"Gold is facing challenges in sustaining upward momentum as optimism around a potential U.S.-China trade agreement grows," said Zain Vawda, an analyst at MarketPulse by OANDA.
The dollar jumped reversing losses from the prior day while European shares rose after a media report that China was weighing tariff exemptions for some U.S. goods, stoking hopes for a de-escalation in a spiralling trade war between the world's two largest economies.
A higher dollar makes the bullion more expensive for overseas buyers.
"A U.S.-China trade agreement could push gold down toward $3,000/oz or lower, depending on other influencing factors," Vawda said.
U.S. President Donald Trump asserted that trade talks with China are underway, pushing back against Chinese claims that no discussions have taken place to ease the ongoing trade war.
Gold, traditionally seen as a hedge against geopolitical and economic uncertainties has gained nearly 26% so far this year. It also touched a record high of $3,500.05 on Tuesday.
Meanwhile, Federal Reserve officials indicated they saw no urgency in revising the monetary policy as they sought more information to determine how the Trump administration's tariffs were affecting the economy.
Non-yielding bullion tends to thrive in a low interest rate environment.
"Now that the market's corrected it will be a good indicator if buying picks up in India," said Ross Norman, an independent analyst.
Spot silver fell 0.6% to $33.36 an ounce, platinum dropped 1.2% at $958.89 and palladium fell 1.6% to $938.78.
Silver was headed for a weekly gain while the other two metals were seen falling for the week.
Source : Reuters
