Gold Falls On Tariff Delay After Hitting 6-Year Peak

Gold Falls On Tariff Delay After Hitting 6-Year Peak

Investing.com  | Aug 13, 2019 20:41

Gold Falls On Tariff Delay After Hitting 6-Year Peak

By Barani Krishnan

Investing.com - Gold retreated on reduced trade-war tensions Tuesday after the Trump administration decided to delay some tariffs on China. But it hit six-year highs in earlier trading on Hong Kong’s political chaos and plunging bond yields worldwide.

retreating on reduced trade war tensions after the Trump administration’s decided to delay some tariffs on China.
retreating on reduced trade war tensions after the Trump administration’s decided to delay some tariffs on China.
retreating on reduced trade war tensions after the Trump administration’s decided to delay some tariffs on China.

Both bullion and gold futures fell after the U.S. Trade Representative delayed until December a 10% import tariff meant to start by September on laptops, cell phones, video-game consoles and other made-in-China products. The decision led to widespread hope that the trade war between the two countries was on the mend.

{68|Spot gold}}, reflective of trades in bullion, was down $9.53, or 0.6% at $1,501.55 per ounce by 2:10 PM ET (18:00 GMT) as Wall Street’s main stock indexes jumped more than 1% each on the heightened risk appetite. Earlier, bullion surged to $1,534.94, its highest level since April 2013, on a new wave of safe-haven buying.

Gold futures for December delivery traded on the Comex division of the New York Mercantile Exchange, settled down $3.10, or 0.2%, at $1,514.10. It hit $1,545.95 earlier, a peak not seen since August 2013.

Gold rallied earlier in the session as Hong Kong remained on the edge from tensions as the territory’s leader Carrie Lam said further violence involving protests could push the territory “down a path of no return.” Analysts warned that the situation could escalate quickly if Beijing decides to act with military force, increasing demand for the safe-haven precious metal.

President Donald Trump tweeted that the Chinese government is moving troops to the "(b)order" with Hong Kong.

Adding to the risk-off sentiment, the surprise defeat of President Mauricio Macri in Argentina’s primary elections over the weekend led to speculation that the country could once again be on the road to default.

Longs in gold had also latched on earlier to the sentiment in bond markets, where the yield on the 10-year Treasury note fell to levels not seen since 2016, while the 30-year yield headed toward all-time lows.

Investors have picked up bonds at the greatest rate since the 2008 global financial crisis, according to the latest Bank of America Merrill Lynch (NYSE:BAC) investor survey that showed U.S. government bonds were the "most crowded" trade for the third-straight month.

“A casual glance around the global news outlets each day suggests many more reasons traders want to own gold than not,” Jeffrey Halley, market strategist at Oanda, said in a note.

On the economic calendar, July inflation data for the U.S. showed a slightly stronger-than-expected reading, paring earlier gains in gold.

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Discussion
Write a reply...
Please wait a minute before you try to comment again.

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.

English (USA) English (India) English (Canada) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 中文 香港 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
NoYes
CancelYes
Saving Changes

+