Gold gains as President Trump talks to President Xi
Investing.com – Gold prices pared gains on Tuesday after U.S. President Donald Trump confirmed he would meet with his Chinese counterpart, President Xi Jinping, at the G20 meeting next week, shining a ray of hope that trade discussions between the world’s two largest economies could advance.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange rose $3.35, or 0.2%, at $1,346.25 a troy ounce by 10:29 AM ET (14:29 GMT), pulling back from an intraday high of $1,358.35.
Trump tweeted on Tuesday that he had a “very good telephone conversation with President Xi” and said that they would have an “extended meeting”. He also indicated that their trade negotiators would begin talks ahead of the G-20.
U.S. stocks extended gains following the tweet, in a boost that dampened safe-haven demand for gold.
Dovish remarks from European Central Bank President Mario Draghi earlier on Tuesday set the mood for start of the Federal Reserve’s two-day policy meeting.
While markets do not anticipate any changes to be made to interest rates when the Fed’s decision is announced Wednesday, expectations were high that the U.S. central bank will open the door to further rate hikes later this year.
Gold generally benefits from lower interest rates that reduce the opportunity cost of holding the non-yielding bullion.
“Indecision and uncertainty abounding and with a big week ahead, much will depend on the Fed and the prospect of an imminent rate cut, a prospect which has certainly increased following the dire Empire State numbers, which could propel gold higher should the U.S. dollar weaken as a result,” Anna Coulling, market analyst and Investing.com contributor, said. “No doubt something all gold bugs will be welcoming.”
In other metals trading, silver futures gained 0.5% at $14.908 a troy ounce by 10:31 AM ET (14:1 GMT).
In base metals, copper jumped 2.0% to $2.700 a pound.