Gold Prices Set for Weekly Rise Despite Mnuchin’s Attempt to Calm Trade-War Fears

Investing.com – Gold prices were set to notch a weekly gain on Friday amid renewed safe-haven demand despite Treasury Secretary Steven Mnuchin’s attempt to calm trade-war fears after U.S. President Donald Trump threatened to impose additional tariffs on Chinese imports.

for June delivery on the Comex division of the New York Mercantile Exchange rose by $6.60, or 0.50%, to $1,335.10 a troy ounce.

Mnuchin told CNBC Friday that while there is possibility of trade war with China, he remained “cautiously optimistic” that the two nations would agree on a compromise.

“Our objective is still not to be in a trade war with [China],” Mnuchin said on CNBC’s “Power Lunch” Friday. “I’m cautiously optimistic that we will be able to work this out … There is the potential of a trade war.”

This comes just hours after Beijing vowed to fight back “resolutely” with fresh measures to protect its interests after President Donald Trump threatened to impose an extra $100 billion in tariffs.

Also helping sentiment was weakness in the greenback after the in March, raising investor doubts about the prospect of the Federal Reserve adopting a faster pace of rate hikes.

“The probability of a June rate hike remains elevated at 79% but without a meaningful uptick in price pressures, the FOMC will find it difficult to justify a second 2018 rate increase,” Stifel said.

In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to interest-bearing assets such as bonds.

In other precious metal trade, rose 0.06% to $16.37 a troy ounce, while rose 0.23% to $917.40 an ounce.

fell 0.63% to $3.055.

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