Gold rises ahead of US-China trade negotiations

Darnell Taylor
October 9, 2019

Spot gold was up 0.3 per cent to US$1,508.23 per ounce as of 0101 GMT.

US President Donald Trump said he was confident of reaching a deal, while Chinese officials are signaling their reluctance to agree to a broad trade deal, according to media reports.

Gold prices slipped for a third straight session on Tuesday, pressured by a stronger dollar and an uptick in equities ahead of upcoming U.S. -China trade talks will stall based on this.

The odds of a USA rate cut when the Federal Open Markets Committee meets on October 29-30 appeared to increase earlier after producer prices fell by the most in eight months, leaving the annual rate of factory gate inflation at 1.4%, its lowest since 2016.

"(However) gold is range-bound right now. "It's a reflection of the trade war and uncertainty this has created among the Chinese authorities - they need to hedge their risks". There's $1,465 to the downside and $1,566 on the upside.

Japan rescues ‘dozens’ of North Korean fishermen
Experts say some fishermen from the North are traveling far out to sea in order to satisfy government mandates for bigger catches. Japan also said an armed North Korean fishing boat "threatened" a Japanese patrol ship in August.

U.K. Prime Minister Boris Johnson failed to persuade German Chancellor Angela Merkel in an early telephone call that his proposals for avoiding border checks in Ireland could be squared with the EU's desire for control over the borders of its customs union and single market.

"It's (gold) got a little bit of downside exposure because there are a lot of people reassessing what happened as they had been too bearish on the economic outlook and current conditions, and they're backing away from that", said Jeffrey Christian, managing partner of CPM Group.

The country's gold reserves hit their highest in more than six years in September, as the trade war and rate cuts boosted investors' interest in non-dollar currencies and alternative ways of storing wealth.

Speculators slashed their bullish positions in COMEX gold and trimmed bullish bets on silver contracts in the week to Oct 1, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. By contrast, European investors, who had bought earlier against a backdrop of Brexit concerns and the European Central Bank's negative interest rates, added only 7.7 tons.

Silver futures for December ended down $0.085, at $17.540 an ounce, while Copper futures for December settled at $2.5770 per pound, gaining $0.0145.

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