Gold loses haven bid as China’s pledge on foreign access, car tariffs rallies stocks
New York (Apr 10) Gold prices slipped modestly Tuesday as global investors piled back into riskier assets, including stocks, as comments out of China soothed trade-war fears for now.
June gold GCM8, +0.06% declined 80 cents, or 0.1%, to $1,339.30 an ounce.
A global equity rally followed Chinese President Xi’s pledge at the Boao Forum that Beijing is developing plans to give foreign companies greater access to financial and manufacturing sectors. These include a cut in tariffs on car imports and an improvement in protection of intellectual property, among other measures.
“Gold prices fell as trade fears moderated, diminishing the appeal of the safe-haven metal,” said Marios Hadjikyriacos, analyst at trading firm XM.
Xi “calmed the nerves of investors regarding any further escalation in the U.S.-China trade spat,” Hadjikyriacos said. “Xi pledged to open up China’s economy further, to lower import tariffs and to strengthen intellectual property protection. Perhaps most importantly, he avoided any provocative comments about trade and protectionism, all of which helped risk sentiment to recover as the probability of a full-blown trade war was seen as declining.”
The Trump administration has threatened tariffs on up to $150 billion of Chinese products, which Beijing has answered with levies of its own and vows to not yield to U.S. pressure.
But geopolitical uncertainty is generally keeping a floor under range-bound gold. For one, the U.S. is preparing for a possible military strike against Syrian President Bashar al-Assad over a suspected chemical-weapons attack that killed civilians. “It will be met, and it will be met forcefully—when, I will not say,” Trump said Monday evening, ahead of a meeting with senior military leaders.
As for economic data, a lower-tier report on small-business optimism hit early Tuesday morning.
A reading on producer prices for March is due at 8:30 a.m. Eastern, followed by a report on February wholesale inventories at 10 a.m. Eastern.
The ICE U.S. Dollar Index DXY, -0.28% which measures the greenback against six major rivals, was near steady at 89.80. A weaker dollar can make U.S.-priced commodities, including gold, more attractive to buyers using other currencies, and vice versa.
May silver SIK8, +0.04% used both for industrial purposes, and so more sensitive to trade issues, and as a haven financial asset, slipped 4 cents, or 0.2%, to $16.490 an ounce.
In exchange-traded funds, the SPDR Gold Shares GLD, +0.34% eased 0.1%. The iShares Silver Trust SLV, +0.84% climbed 0.1%, while the VanEck Vectors Gold Miners GDX, +0.64% traded flat.
Meanwhile, copper for May delivery HGK8, +1.62% gained 0.6% to $3.095 a pound on the Comex division of the New York Mercantile Exchange
MarketWatch
