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Saturday, April 1, 2023

Gold Falls, Losing out to Dollar as Trade War Hedge

Gold Falls, Losing out to Dollar as Trade War Hedge© Reuters.

Investing.com – The luster of gold isn’t powerful enough for those seeking a hedge to the trade war.

Gold prices fell back on Monday, settling down for the sixth time in seven sessions, as investors turned again to the relative safety of the dollar amid the drag in U.S.-China trade negotiations.

Bullion and gold futures got a reprieve on Friday, outshining the dollar, as the U.S. and China missed an opportunity to hold a summit that might have expedited a trade deal between them. China needs that deal by March 1 or risk having tariffs on $200 billion of imports raised to 25% from 10%.

“Currently, the price of gold is under pressure as the dollar Index continues to rally versus other world currencies,” said Walter Pehowich, executive vice-president at Dillon Gage Metals in Addison, Texas.

“If the rally continues, technical support levels in the price of gold will be tested,” Pehowich added. “Spot support levels will be the previous resistance levels at $1,303.”

The contract, reflective of trades in physical bullion, was down $5.66, or 0.4%, to $1,308.60 per ounce by 3:39 PM ET (20:39 GMT).

In , gold’s benchmark April contract on the Comex division of the New York Mercantile Exchange settled down $6.60, or 0.5%, at $1,311.90 per ounce.

The , which tracks the greenback against a basket of other major currencies, rose 0.5% to near one-month highs of 96.917.

Both the spot price and futures price of gold fell 0.3% last week after declining four consecutive sessions.

The lack of a meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping has dampened hopes for a smooth resolution to the U.S.-China trade war, one of the most intense rivalries of this generation. U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer are in China this week for another round of talks.

Gold futures hit highs above $1,300 for five-consecutive sessions through Jan. 31, peaking at $1,331.10, as investors raised their stakes in the yellow metal amid Fed reassurances that it will be patient with rate hikes.

Palladium remained the world’s most valuable traded metal, despite its sliding by $17.85, or 1.3%, to $1,388.10 per ounce.

Spot palladium first traded above gold last month when it hit record highs of $1,440.35 on Jan. 17. Gold’s own peaks have been higher in the past, rallying above $1,900 in 2011.

Trades in other Comex metals as of 3:39 PM ET (20:39 GMT):

down $10.75, or 0.8%, at $1,360.45 per ounce.

down 11.2 cents, or 0.7%, at $15.70 per ounce.

up $14.30, or 1.8%, at $788.20 per ounce.

down 2.3 cents, or 0.8%, at $2.79 per pound.

Source: Investing.com

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