· Gold prices rose on Wednesday after a speech by U.S. President Donald Trump dashed hopes for a positive sign on a U.S.-China trade deal, prompting investors to seek safety in the metal.
Spot gold rose 0.4% to $1,462.15 per ounce by 0628 GMT, while U.S. gold futures advanced 0.7% to $1,463.30 per ounce.
· Asian stocks and Wall Street futures fell as growing worries that trade talks are stalling and concern about intensifying unrest in Hong Kong hurt demand for risky assets.
U.S. and Chinese negotiators were “close” to a “phase one” trade deal, Trump said in Tuesday’s speech to the Economic Club of New York, but offered no new details on negotiations.
· “The downtrend (in gold) has paused. President Trump, on one hand, said the deal was close and, on the other hand, said he will raise the tariffs if a deal is not reached,” said Michael McCarthy, chief market strategist at CMC Markets.
“This didn’t help the trade situation but supported gold.”
· Gold, considered a safe store of value during economic and political uncertainty, has risen about 14% this year on concerns over the trade war and monetary policy easing by central banks.
· “As long as things (trade deal) are not stamped and sealed, uncertainty is going to prevail in the market and gold will receive support,” said Ajay Kedia, director at Kedia Advisory in Mumbai.
Later on Wednesday, Fed Chairman Jerome Powell is set to testify on the economic outlook before the congressional Joint Economic Committee.
· Political unrest in the Asian financial hub of Hong Kong provided support for the precious metal, as police battled pro-democracy protesters at several university campuses in the Chinese-ruled city.
· “Slowing economic growth, geopolitical risk and an easing interest rate cycle remain the reality,” ANZ Bank said in a note. “And such a backdrop should support gold investment demand through 2020.”
· Palladium was up 0.5% at $1,708.20 an ounce.
· Silver rose 1% to $16.94 per ounce, and platinum gained 0.8% to $875.18.
Reference: Reuters
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