Investing.com – The missed U.S-China summit opportunity is good for gold. The only trouble is the dollar is rallying on that too, as the greenback has become a hedge to trade troubles as well, capping gold’s safe-haven potential.
Both bullion and gold futures were on the positive side of $1,300 for the first time in six sessions on Friday, reacting to news that U.S. President Donald Trump will not meet with Chinese counterpart Xi Jinping before the March 1 deadline to sign a trade deal.
The contract, reflective of trades in physical bullion, was up $4.72, or 0.4%, at $1,314.84 per ounce by 12:14 PM ET (17:14 GMT).
In , gold’s benchmark April contract on the Comex division of the New York Mercantile Exchange rose $4.35, or 0.3%, to $1,318.55 per ounce.
The lack of a meeting between the two leaders dampens hopes for a smooth resolution to one of the most intense trade wars ever in this generation. U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer is still expected in China next week for another round of talks to avert an increase in U.S. tariffs on Chinese goods.
“Investors are getting nervous as the market had been optimistic about a resolution of the trade dispute since the beginning of the year,” said Shusuke Yamada, chief Japan FX and equity strategist at Bank Of America Merrill Lynch.
But for the week, gold was down, heading for a loss of 0.3% in futures trade in what would be the first weekly dip in three.
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.
The dollar also rallied Friday on the missed summit opportunity. Trade uncertainty tends to support the dollar, which is considered a safe haven in light of trade tensions.
The , which tracks the greenback against a basket of other major currencies, rose for the fifth week in a row. Prior to the renewed worries over China, the dollar had been under pressure from the Fed’s patient stance.
Palladium remained the world’s most valuable traded metal, with its trading at $1,398.50 per ounce, up $12.40, or 0.9% on the day.
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 12:14 PM ET (17:14 GMT):
up $14.35, or 1.1%, at $1,372.45 per ounce.
up 7.4 cents, or 0.5%, at $15.79 per ounce.
up $2.50, or 0.3%, at $799.80 per ounce.
down 1.3 cents, or 0.5%, at $2.82 per pound.
Source: Investing.com
