Gold Prices Slide as Trade Worries Push Dollar Higher

Investing.com – Gold prices traded lower on Tuesday as traders returned to their desks after the U.S. holiday weekend and trade tensions coupled with market turmoil in Argentina and Turkey underpinned demand for the dollar.

At 10:55 AM ET (14:55 GMT), for December delivery on the Comex division of the New York Mercantile Exchange fell $8.70, or 0.72%, to $1,198.00 a troy ounce.

Meanwhile, the , which measures the greenback’s strength against a trade-weighted basket of six major currencies, gained 0.47% to 95.52.

A stronger greenback makes the dollar-denominated metal more expensive for holders of foreign currencies.

Demand for the dollar was bolstered by the risk-off mood in markets amid fears over the impact on global growth from the Trump administration’s protectionist trade policies and strains in emerging markets.

U.S. President Donald Trump said last week he was ready to implement tariffs on an additional $200 billion worth of imports from China as soon as Thursday, which would ratchet up the trade row with Beijing.

Meanwhile, trade talks with Canada remained at an impasse after stalling on Friday, with Trump threatening to leave Canada out of a new deal already negotiated with Mexico.

In emerging markets, Turkey remained under watch amid lingering concerns over the country’s economic and currency crisis, while Argentina’s government scrambled to deal with its own fresh economic crisis.

U.S. data released on Tuesday showed that manufacturing activity stateside hit its fastest pace in 14 years as new orders continued to show strength.

The strong reading reinforced the idea of a booming American economy which Federal Reserve chairman Jerome Powell said was a necessary condition to move ahead with plans for gradual increases in interest rates.

In other metals trading, slumped 2.76% at $14.155 a troy ounce by 10:56 AM ET (14:56 GMT).

dipped 0.35% to $965.90 an ounce, while sister metal traded down 1.70% at $773.70.

In base metals, slid 2.81% to $2.596 a pound.

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