Gold Prices Gain modestly amid Potential US-Japan Trade Issues
Singapore (Sept 7) Gold prices rose on Friday morning in Asia as the U.S. dollar slipped against Japanese yen amid fears that Washington would turn its attention on trade issues with Tokyo, after it slapped 25% tariffs on Chinese products in late August and with the potential of further tariffs hanging in the balance.
Gold futures for December delivery climbed 0.27% to $1,207.5 per troy ounce at 11:48PM ET (03:48 GMT) on the Comex division of the New York Mercantile Exchange.
The USD/JPY pair dropped 0.16% to 110.57, as U.S. President Donald Trump told a Wall Street Journal columnist that he is considering taking on trade issues with Japan. The news sparked concerns in markets and raised demand for the yellow precious metal, which is seen as a safe haven asset during turmoil.
“Investors were worried that sooner or later, Japan’s auto industry would be Trump’s target and now they are bracing for more details. The mood has deteriorated as the market was already nervous with U.S.-China tariff issues,” said Daiwa Securities Strategist Takuya Takahashi.
A fresh wave of tariffs on an additional $200 billion worth of Chinese goods that can take effect as early as today is also keeping markets on edge. Public consultation on this new round of tariffs is already done.
Although Beijing warned the U.S. that it would retaliate against new tariff measures, Trump said on Wednesday that Washington is not ready to reach an agreement with China.
At the same time, the increase in private payrolls last month in the U.S failed to meet expectations. The ADP National Employment Report out on Thursday showed that private payrolls climbed by 163,000 jobs in August, lower than Reuters’ forecast of 190,000 jobs.
The Australian dollar has also been affected by the U.S.-China trade war due to its close ties with China and Australia’s dependence on offshore funding. The Australian dollar tumbled 3% in August and fell to 71.45 U.S. cents this week, the lowest rate since May 2016.
Investing.com
