Gold price falls on US-China trade pact hopes
Is the bull market coming to an end?
December futures have dipped in trading following mounting reports of a partial reconciliation between the United States and China. Positive comments from senior officials coupled with broad gains in equities saw a brief early rise dashed.
Spot gold was down 2.80 per cent at $1,468.40 by mid-afternoon trading.
White House economic adviser Larry Kudlow stated that the United States was "getting close" to agreeing a limited interim trade pact with China.
Investors have routinely flocked to gold, silver and the Japanese Yen as safe-haven assets when the mood music around the trade talks have been less positive.
Gold prices have gained over 14 per cent in 2019 as a result of the ongoing trade war with investors fearing a global economic slowdown and central bankers lowering interest rates.
In a note to clients analysts at Commerzbank, one of the largest banks in Germany, commented on Kudlow’s hints: "To be blunt, such rhetoric is more or less the same as Steven Mnuchin (who) said months ago that a deal was "99 per cent done".”
The Chinese have been less positive this week in their analysis of the state of trade talks. A spokesman for the Chinese Ministry of Commerce stated that a deal can only be reached if tariffs are lifted, observing that the extent of the tariff lifting should reflect the deal’s importance.
Subtly blaming the U.S. for the current state of economic growth around the world President Xi Jinping observed: “Growing protectionism is threatening international trade and investment, leading to a global economic slowdown.”
FURTHER READING: Gold price under pressure amid trade and security threats