Gold prices rose on Monday as the dollar fell against the yuan after U.S. President Donald Trump said he would delay an increase in tariffs on Chinese goods, while palladium surged to a record high.
Spot gold rose 0.2 percent to $1,330.48 per ounce at 0532 GMT. U.S. gold futures were steady at $1,333.
The offshore yuan strengthened 0.6 percent to 6.673 yuan against the dollar, after hitting its highest level since mid-July, on the news that Trump might not raise tariffs on $200 billion of Chinese imports to 25 percent from 10 percent.
A strong yuan makes gold cheaper for world’s leading gold consumer, China.
Trump said on Sunday that he would delay an increase in tariffs on Chinese goods that had been scheduled for later this week, citing “substantial progress” in Sino-U.S. trade talks over the weekend, and that he and his Chinese counterpart would meet to seal a deal if progress continued.
“The dollar is weaker today after Trump’s extension of tariff deadline,” said Jeffrey Halley, senior market analyst, OANDA.
Asian shares scaled a 5-month peak after Trump’s decision to extend the deadline improved appetite for riskier assets.
Gains in equity markets tend to decrease appeal for gold, considered a safe store of value during economic and political uncertainty.
“Gold prices, though hinting for a looming bearish correction on risk-on market sentiments, will remain firmly supported on rising economic uncertainties and heightened geopolitical risks in 2019,” Benjamin Lu, an analyst with Singapore-based Phillip Futures said in a note.
Meanwhile, spot palladium traded as high as $1,506.50 per ounce, propelled by a stark supply deficit, and was last up 0.5 percent at $1,505.
Platinum, which rose to its highest since late November, was up 0.4 percent at $843.50 per ounce.
The platinum group metals (PGM) continued to rise as supply risks increased after South Africa’s Association of Mineworkers and Construction Union (AMCU) planned to extend a strike from Sibayne Gold to other PGM producers in the country, ANZ analysts said in a research note.
The AMCU has been on strike at Sibanye’s bullion operations since mid-November and plans to extend the strike to its platinum mines as well as all other mines where the AMCU has members.
Elsewhere, spot silver rose 0.3 percent to $15.96 per ounce.
Categories: World News