Other Comex metals finish broadly lower
Gold futures ended higher Thursday as investors braced for an intensifying Sino-U.S. trade conflict, which could provide a lift to bullion amid markets stricken by international trade fears.
The precious metal traded higher “with news flow on the trade situation favoring uncertainty and the dollar posting very minimal weakness,” said analysts at Zaner Metals.
Gold for June delivery GCM9, +0.12% gained $3.80, or 0.3%, to settle at $1,285.20 an ounce, recovering much of its $4.20, or 0.3%, loss from the previous session. The precious metal posted its fourth gain in five sessions, according to FactSet data, putting it on track for a weekly rise of about 0.3% based on last Friday’s settlement.
The U.S. is set to raise tariffs on some $200 billion in Chinese imports to 25% from 10% on Friday morning at 12:01 a.m. Eastern Time, as the Trump administration attempts to ratchet up pressure on Beijing to strike a substantive trade agreement.
At a Wednesday rally with supporters in Florida, President Donald Trump said China “broke the deal.”
The Wall Street Journal reported that China has adopted hardball tactics, as it perceives signs of weakness in the U.S.’s negotiating position. On Wednesday, the newspaper also reported that Beijing has threatened unspecified retaliation if the White House pushes through tariff increases, even as China’s trade envoy, including Vice Premier Liu He, were to commence fresh negotiations Thursday, highlighted by a dinner between Liu and U.S. trade negotiator Robert Lighthizer.
“Seeing the president in a campaign rally indicate that China ‘broke the deal’ could have the impact of discouraging China from negotiating in the coming two days,” said analysts at Zaner. “At this point, we suggest a deal in the coming 48 hours appears to be unlikely.”
Gold has benefited somewhat against this backdrop of uncertainty, and some gold bulls say the commodity may claw higher if trade talks deteriorate further, and as the increased China import duties come into force.
“Having already breached the $1,290 level this week before moderating, bullion may surge past that level once again, in the event that negotiations in Washington break down and higher US tariffs kick in,” wrote Han Tan, market analyst at FXTM, in a Thursday research note.
However, commodity investors have expressed disappointment that the yellow metal hasn’t enjoyed a more decisive rally.
“Gold was unable to break the first resistance placed at $1,288, confirming that the times are not mature for another bullion rally yet,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades.
Meanwhile, the dollar, as measured by the ICE U.S. Dollar Index DXY, -0.10% fell by 0.3% as gold futures settled Thursday. U.S. benchmark stock indexes also fell.
“Clearly, the gold focus this week has been centered on safe haven from trade and not on the ebb and flow of the dollar,” said analysts at Zaner. “However, dollar action this week has not yielded much in the way of direction with a tight sideways coil and therefore the question of the dollar’s importance on gold prices is unknown at present.”
Heightened conflicts with Iran, where Tehran has threatened to abandon commitments under a 2015 nuclear agreement and signs of increased aggressions from North Korea, should push up prices of the asset that appreciates during global turmoil, market participants said.
In other metals trading, July silver SIN9, +0.01% fell 8.9 cents, or 0.6%, to $14.773 an ounce, with the commodity on track for a 1.3% weekly skid.
July copper HGN9, +0.20% shed 0.1% to $2.772 a pound, July platinum PLN9, +1.87% fell by 1.5% to $851.40 an ounce and June palladium PAM9, +5.07% settled at $1,283 an ounce, down 1.8%.
Among ETFs, SPDR Gold Shares GLD, +0.19% added 0.3%, while VanEck Vectors Gold Miners ETF GDX, -0.73% rose 0.4%. The iShares Silver Trust SLV, +0.07% was down 0.4%.