Gold slid 2% after US suspends 10% tariff-hike on certain Chinese products

by   |  VIEW 268
Gold slid 2% after US suspends 10% tariff-hike on certain Chinese products

On Tuesday, the 13th of August 2019, global financial markets alongside American dollar gained some of its footings lost since July 31st’s Fed rate-cut, as Beijing and Washington had agreed to resume trade talks despite tariff hikes on each other’s product, while gold shed as much as 2 percent on Tuesday’s (August 13th) market closure after US President Donald Trump and his administration had decided not to incline higher tariffs on certain made-in-China products likes of laptops, cell phones and telco devices until Christmas sales.

Aside from that, investors’ optimism to riskier asset buoyed further on Tuesday (August 13th) market followed by the reveal of a report that the tariff-war-struck economies of United States and Beijing had agreed to resume trade talks.

On Tuesday’s (August 13th) market closure, US Dollar (DXY) index measured against a basket of six major currencies rose 0.4 percent, while spot gold rounded off the day 0.7 percent lower to $1,501.22 after spiking to $1,534.31, its highest level since April 2013, however, US gold futures wrapped up the day 0.2 percent lower to $1,514.1 an ounce.

Adding that a broad-based gold rally would likely to persist ahead of at least one interest rate-cut by September this year, a head of base and precious metals derivatives trading at BMO, Tai Wong said, “A thawing, perhaps reconsideration of the new proposed tariffs has drained the heat from the (gold) rally for now.

While this does not dramatically dim the overall positive outlook for gold, it will temper its momentum in the short term”.