· Gold prices rose on Wednesday, a day after sliding 2%, as doubts about a U.S.-China trade breakthrough buoyed demand for the safe-haven metal.
· Spot gold rose 0.5% to $1,490.75 per ounce as of 1:43 p.m. EST (1843 GMT). U.S. gold futures settled up 0.6% at $1,493.10.
· In the previous session, bullion touched a three-week low of $1,479.25 and registered its biggest one-day percentage drop since late September.
· “The fact that China is stepping up and saying, before we sign anything we are looking for rollbacks in tariffs, which brings into question whether the previous statement that a phase one deal could be signed in November has any validity,” said David Meger, director of metals trading at High Ridge Futures.
· A meeting between U.S. President Donald Trump and Chinese President Xi Jinping to sign an interim trade deal could be delayed until December as discussions continue over the terms and venue, a senior official of the Trump administration told Reuters on Wednesday.
Earlier in the week, reports said China was pushing Trump to remove more tariffs imposed in September as part of a “phase one” trade deal.
· “If China is going to be unwilling to sign anything without rollbacks, that once again brings what could be a bone of contention to the potential for signing the ‘phase one’ deal.”
· World stocks retreated from record highs after the report that the U.S.-China trade deal could be delayed until December.
· There is a slight shift into risk-off assets, such as gold, as industrial productivity in the U.S. surprisingly fell, while the dollar index has weakened as well, supporting bullion, said Phillip Streible, senior commodities strategist at RJO Futures.
· Nonfarm productivity fell at a 0.3% annualized rate between July and September. Analysts had expected productivity growth of 0.9% during the quarter.
The dollar index eased against key rivals, from a near three-week high touched in the previous session.
· “If we see a U.S.-China trade agreement, most likely there would be a knee jerk reaction in the gold market, which would sell off,” Streible said, adding prices would eventually recover as it might be difficult to get a complete overhaul of the trade deal.
· The trade war is one of the key reasons for gold, a safe-haven asset during times of economic and political uncertainty, jumping about 16% so far this year.
· Silver rose 0.1% to $17.61 per ounce, having touched its lowest since Oct. 17 earlier.
· Platinum was down 0.1% at $928.21 per ounce. The metal hit a one-week low of $917. Palladium gained 0.7% at $1,790.48.