Gold Holds Near $4,000 as Traders Weigh US-China Trade Truce
Gold steadied near $4000 an ounce as traders weighed a US-China trade truce that failed to quash concerns about long-term competition between the world’s two largest economies.
Spot gold pared losses after declining as much as 0.8% an ounce on Friday in Asian hours. Chinese leader Xi Jinping called for stable supply chains in his first public remarks after meeting with US President Donald Trump.
Talks between the two leaders appeared to resolve – for now – months of brinkmanship, but a one-year pause is likely only to stabilize relations while buying each side time to reduce strategic dependence. The détente also underscored the rise in China’s economic clout since Trump’s first term as US president, a shift that is fueling interest in haven assets.
Bullion is headed for a second weekly drop and is down around 8% from a record high above $4,380 on Oct. 20. The retreat has most recently been aided by reduced expectations of further Federal Reserve rate cuts. Chair Jerome Powell warned that investors should rein in hopes for a December reduction after a quarter-point cut on Wednesday.
Despite its recent pullback, gold has still advanced more than 50% this year, with support from a push by mainstream investors to safeguard their portfolios against risk as well as accelerated central-bank buying, the World Gold Council said in a report on Thursday. Central banks purchased 28% more gold in the third quarter than during the preceding three months, reversing a downward trend seen earlier this year.
Spot gold fell 0.% to $4,021.21 an ounce as of 8:02 a.m. in London. The Bloomberg Dollar Spot Index rose 0.1%. Silver, platinum and palladium all advanced.
“Uncertainty is creeping back into markets after the US-China trade truce update, which should see dip buyers adding support for gold for the remainder of the year,” said Nick Twidale, chief market analyst at AT Global Markets in Sydney. The metal’s recent correction may have run its course, he said.
Source: Bloomberg
