Weaker Dollar Helps Metal Prices Sidestep Escalating U.S.-China Trade War

Investing.com – Metal prices traded higher Wednesday, shrugging off an escalating U.S.-China trade war and buoyed by a retreat in the dollar.

for August delivery on the Comex division of the New York Mercantile Exchange rose by $2.90, or 0.24%, to $1,221.20 a troy ounce, from an intraday a low of $1,214.20.

The Chinese Ministry of Commerce said Wednesday it will impose a 25% charge on $16 billion worth of U.S. goods. The 333 goods targeted by China would include vehicles, and fiber optical cables.

The announcement from China comes after the Trump administration followed through with a 25% tariff on an additional $16 billion of Chinese goods Tuesday evening.

The latest volley of American and Chinese tariffs takes the total of targeted goods to $50 billion on each side and are slated to come into effect on Aug. 23.

That stoked demand for safe havens such as gold, the yen and Treasuries, pressuring the dollar lower.

The , which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.07% to 94.92.

But respite for gold prices, which have tumbled for four-straight months, may prove to be short lived as the Federal Reserve is widely expected to raise interest next month.

About 96% of traders expect the Federal Reserve to hike rates in September, according to Investing.com’s .

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

The wider metals market was largely unaffected by renewed trade-war concerns as the weaker dollar dominated direction.

rose 0.15% to $2.76, while rose 0.28% at 2,608.75.

rose 2.70% to 2,111.75, while rose 1.14% to 14,030.00.

rose 0.53% to $15.46 a troy ounce, while gained 0.28% to $833.70.

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