Gold Under Pressure as US-China Tensions Wane
Arslan Butt • 1 min read
Early on Monday, the precious metal gold continues its losing streak from the previous week as risk appetite returns cautiously to global financial markets as countries ease lockdowns and resume normal operations. At the time of writing, GOLD is trading at a little above $1,941.
Gold prices posted their worst performance over the past week, driven lower by expectations of economic recovery in countries around the world after the pandemic. Meanwhile, hopes of easing tensions between the US and China after the two countries decided to delay their review of the phase one trade deal also dented the safe haven appeal of the yellow metal.
Officials from both countries were expected to conduct a six-month review of the interim trade agreement on Saturday, but announced a postponement of it. According to latest reports, China is increasing its purchases of farm and energy products from the US, helping reduce some of the trade tensions.
Gold is also trading under pressure over a slight strengthening in the US dollar, driven by an improvement in US bond yields. The US dollar, which shares a negative correlation with gold, has also been recovering after touching a two-year low as it comes back in favor among traders as a safe haven currency.