Gold Inches Lower on Rising Expectations for “Phase 1” Trade Deal
Gold prices continue to drift lower for a second consecutive day on Tuesday as hopes rise for a partial trade deal between the US and China. At the time of writing, GOLD is trading at a little above $1,505.
The US dollar has been gaining strength while the appeal of safe havens like gold and the Japanese yen diminish as markets expect a partial resolution to the trade war soon. Markets are trading a risk-on sentiment, pushing investors towards riskier assets, with Asian equities rising to their highest levels in over three months.
Strong economic data releases from the US and positive comments from the US and China on negotiations towards a “Phase 1” trade deal are supporting the greenback and taking away gold’s sheen. A strengthening dollar turns gold more expensive to purchase and hold.
According to a news report on the Financial Times, the US could even drop some tariffs on Chinese imports as talks progress, which has further boosted the market sentiment. However, gold prices continue to remain supported over weak data from the Us manufacturing sector, which continues to show signs of strain in the face of prolonged trade tensions.
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