Gold rebounds as investors prepare for trade talk fallout
Caution over US-China trade negotiations has pushed up the price of gold
Gold reached a near week-long high on Thursday, as investors brace themselves for trade talks between the United States and China, Reuters reports.
Standing at $1,507.85 (£1,230.97) at 11:00 GMT, the yellow metal has bounced back from Tuesday’s weekly low of $1487.48 (£1,213.44).
US gold futures rose moderately as did spot gold, currently at $1,510.30 (£1,233.42) per ounce, a change of 2.7 or 0.18%. Spot gold is the price at which gold can be bought and sold immediately, or “on the spot”.
Gold is attractive to investors looking to hedge against political and financial instability. Gold ETF holdings are at their highest level for three years. Holdings in the largest gold-backed ETF, SPDR Gold Trust, are at their highest since November 2016.
Central banks are also buying significant amounts of gold. Russia and China have built up their reserves to try to reduce their dependence on the US dollar.
Although both sides have been combative in the weeks leading up to the US-China talks, there are hopes for a resolution of trade tensions.
Bloomberg reported that US President Donald Trump is still keen to press on with a previously agreed currency pact with the emerging superpower. Furthermore, the New York Times reported that Washington might allow some US companies to supply non-sensitive goods to Huawei Technologies. The Chinese technology giant is currently on an “entity list”, blacklisting it from doing business with US firms.