Gold has ticked lower in the Wednesday session. In North American trade, the spot price for one ounce of gold is $1237.47, down 0.10% on the day. In economic news, there are no major events. On Thursday, the focus will be on U.S. employment data, with the release of ADP nonfarm payrolls and unemployment claims. The U.S. will also release ISM Non-Manufacturing PMI.
It’s been a good week for gold, which has posted gains of 1.2 percent. The catalyst for higher gold prices has been the response to the weekend meeting between President Trump and Chinese President Xi Jinping at the G-20 summit. Global stock markets climbed sharply after Trump suspended his threat to raise tariffs on Chinese products as of December 1. However, the optimism proved to be short-lived, as investors are asking if the 90-day truce is simply a pause in the trade war between the world’s two largest economies. Investor risk appetite softened on Tuesday, and safe-haven gold was in strong demand, as gold touched a high of $1239, its highest level since October 22.
Now that there is a respite in the tariff war, can the U.S. and China narrow their differences in just a few weeks? The U.S. and China, including repeated charges by the U.S. that China is engaged in theft of U.S. intellectual property. The markets have been very sensitive to the trade dispute, and the upcoming negotiations between the U.S. and China, with the likely ups-and-downs, promise to have a significant effect on the direction of USD/JPY.
The ‘tariff truce’ between the U.S and China is welcome news after months of an escalating trade war, but the two super-economies remain far apart on a number of issues, including U.S. accusations that China has been stealing U.S. intellectual property. All indications are that reaching a deal will be difficult. The markets have been sensitive to development in the tariff tussle between the countries, and the likely ups-and-downs in the upcoming negotiations will likely affect the movement of gold prices in the coming weeks.
