Gold price advances for 3rd day as looming Chinese trade meeting underpins haven metal
London (April 4) Gold futures rose for a third straight session Tuesday, underpinned as financial markets nervously await a late-week meeting between President Donald Trump and his Chinese counterpart.
Haven gold also found a floor as well as a highly anticipated employment report out Friday could hold further clues for the pace of interest-rate hikes, especially in light of other recent softening data.
“Gold has been profiting not only from the weak U.S. vehicle sales figures in March, which have weighed on sentiment among market participants, but also from falling stock markets and lower bond yields,” said Carsten Fritsch and the commodities team at Commerzbank, in a commentary.
“What is more, gold ETFs also recorded inflows of four [metric] tons,” Fritsch added
Early Tuesday, June gold GCM7, +0.68% was up $5.70, or 0.5%, at $1,259.70 an ounce. Gold booked a roughly 8% first-quarter advance for the most-active contract.
May silver SIK7, +1.00% traded up 16 cents, or 0.9%, at $18.38 an ounce. A close at this level would be a lead contract’s best since the beginning of March.
Global financial market volatility over U.S. diplomacy could underpin haven gold and silver this week.
President Trump meets with Chinese President Xi Jinping at Trump’s Florida estate and golf club on Thursday and Friday to discuss trade. Trump has already described the meeting as “very difficult”.
“Considering statements made by President Trump about China’s trade policies, it will be interesting to see if the two presidents can work with each other,” said Gary Wagner, of TheGoldForecast.com. “To that end, their talks could contain the beginnings of a bridge between our two countries, or a further divide. These discussions could culminate into little more than a friendly handshake.”
Yields on the benchmark 10-year Treasury note TMUBMUSD10Y, -0.23% were unchanged near 2.333%, but had dropped already this week as investors were seeking the perceived safety of government bonds, pushing prices up and yields lower. Lower yields also are supportive for gold, which doesn’t bear a yield. Stock futures pointed to declines for the leading indexes.
A recent recovery in the U.S. dollar DXY, +0.16% , which was up 0.2% on Tuesday, capped gold’s gains, making the metal less appealing to those buying the commodity using weaker currencies.
Looking ahead, metals traders will be focused on key employment data from the U.S., the nonfarm-payrolls report due out Friday. A survey of economists polled by MarketWatch are forecasting that 178,000 jobs were created in March, with the unemployment rate steady at 4.7%.
The Federal Reserve, which has resumed its plan to normalize monetary policy from ultralow levels, will look to the jobs report in part to help determine its pace of rate hikes. A more aggressive pace of rate hikes also can erode demand for commodities that don’t offer a yield. And some insight into the Fed’s thinking could come with Wednesday’s release of the central bank’s most-recent policy meeting.
In exchange-traded funds, the SPDR Gold Trust GLD, +0.54% was up 0.3% premarket, the VanEck Vectors Gold Miners ETF GDX, +1.29% gained 1.7%, while the iShares Silver Trust SLV, +0.99% was off less than 0.1%.
Source: MarketWatch
