Trump to meet with Xi – Gold stays at $1400
By Barani Krishnan
Investing.com – China deal or no deal?
Speculation ahead of the meeting between U.S. President Donald Trump and China President Xi Jinping is blowing both hot and cold. That’s prompted gold bulls to yield little on the yellow metal’s price, even as it remains under pressure from tamped down expectations for a large rate cut in July by the Federal Reserve.
Spot gold, reflective of trades in bullion, traded at $1,409.55 per ounce by 2:10 PM ET (18:10 GMT) on Thursday, down $5.85, or 0.4%, on the day. It was the second negative day in a row for bullion, after seven-consecutive days of gains prior. On Tuesday, the spot price of gold had one last hurrah, reaching $1,438.99, its highest since May 2013, before slipping since.
Gold futures for August delivery, traded on the Comex division of the New York Mercantile Exchange, settled Tuesday’s trade down $3.40, or 0.2%, at $1,412 per ounce. On Tuesday, it peaked at $1,442.15, its highest level since Feb 2014.
Gold’s rally in June, a more-than-8% gain that’s been its biggest in three years, came to a halt this week as Fed Chairman Jerome Powell and St. Louis Fed President James Bullard doused expectations for a 50-basis-point rate cut in July.
Investors in the precious metal have turned since to reading the upcoming trade talks between Trump and Xi at the G20 in Osaka. But with just two days until their meeting, Larry Kudlow, Trump’s top economic advisor, said there were no preconditions set for the talks. Kudlow added that the White House may move forward with additional tariffs against Beijing.
Asked to clarify a similar comment from Trump on the forthcoming U.S.-China trade deliberations, Kudlow told Fox News that the president “is implying that he’s perfectly happy where we are and where he is in these so-called negotiations and talks.”
“And, if need be, we may move ahead – we may move ahead on additional tariffs,” he added.
Kudlow’s remarks came a day after U.S. Treasury Secretary Steve Mnuchin insisted that two countries were “90% of the way” toward a trade deal.
The U.S.-China trade war has been a major wildcard for gold this year. While the dollar has been the preferred hedge against the trade war, investors have also been using gold to offset risks from the tariffs battle between the two economic superpowers.
China apparently is going to present a series of conditions for any deal at the meeting, The Wall Street Journal reported Thursday. Among the most important is a demand that the U.S. remove its ban on the sale of U.S. technology to Chinese telecommunications giant Huawei Technologies.