Gold peaks in 10 months, continued trade talks catches the market's attention



Gold futures rebounded nearly 2% Tuesday to record their highest level of performance since April, as the stock market took a defensive stance following the latest round of talks between the two countries.

Financial markets await the latest commercial developments, while discussions resumed Tuesday in Washington. A 90-day truce between the parties is expected to end in early March. President Trump tweeted Sunday about trade talks saying, "Great progress is being made on so many different fronts!"

Jeff Wright, executive vice president of GoldMining Inc., said he "remained optimistic about the framework of an agreement in the coming weeks; although he will probably be postponed beyond March 1st. "

April April

GCJ9, + 1.66%

earned $ 22.70, or 1.7%, at $ 1,344.80 an ounce. According to FactSet data, this was the largest and most active contract settlement since April 19th and the largest dollar gain in a single session and as a percentage since November 1st. The contract was set at a two-week high of $ 1,322.10 Friday, enough for the contract to turn positive for last week. US markets were closed Monday for Presidents' Day.

"The uncertainty of trade negotiations and the fear that the US stock market will run out of steam will lead to increased capital flows to a more protective allocation," said Peter Hug, global sales director at Kitco Metals Inc.

"The Brexit problem, which arises in 5 weeks, could derail the entire continent and traders on the other side of the pond see increased physical demand for gold," he said. daily. Traders will also look at the report of the January Federal Reserve meeting to be held on Wednesday "to re-analyze the confirmation by the Fed of a future dovish stance".

The gold, generally bought as a safe haven in times of political uncertainty, has seen daily movements largely eased. Nonetheless, Trump's declaration of a national emergency late last week to pay for a wall along the US-Mexico border prompted 16 states to file a lawsuit on Monday to challenge the statement. This could offer some support for gold, analysts said Zaner Precious Metals.

US benchmark indexes rose slightly in Tuesday's talks and bond demand drove yields lower.

"A further weakness in government bond yields could further underpin low-yield, non-interest-bearing assets such as gold and silver, although equities can no longer ignore the deterioration of the global economy, "said Fawad Razaqzada, market analyst. Forex.com.

Precious metals tend to attract purchases in a climate of low interest rates. Higher rates make non-performing gold less attractive for investors looking for higher yields elsewhere.

For the moment, Wright said the weaker US dollar had helped support the gold. Getting prices for metal above $ 1,350 "could be a short-term challenge, but obviously the trend is moving towards that level," he said.

The dollar, as measured by the ICE US Dollar Index

DXY, -0.26%

was down 0.5% to 96,471. Weak money can make the purchase of dollar-denominated assets relatively cheaper for those who use other monetary units.

Of the other metals, the March money

SIH9, + 1.41%

rose 22.4 cents, or 1.4%, to $ 15.967 an ounce. Mars copper

HGH9, + 2.68%

added 2.7% to $ 2.875 per pound. April platinum

PLJ9, + 1.80%

increased by 1.8% to $ 821 an ounce.

Mars palladium

PAH9, + 3.38%

jumped 3.3% to finish at $ 1,453.90 an ounce, continuing to survey new records, based on FactSet data dating back to November 1984. The most active contract rose 2.6% last week. Metal prices have hit new highs for months, driven by rising demand, particularly in the auto sector, and by tightening inventories.

Lily: Here's what could defeat the palladium record

Provide essential information for the US trading day. Subscribe to the free MarketWatch Need to Know newsletter. Register here.


Source link