$GLD, $SLV, $USD
- Gold pared gains as China became a focus point again
- The possible progress in the trade dispute pressured the USD.
Gold prices dipped Thursday as investors purchased riskier assets instead of seeking a safe-haven in gold, on news a new round of US-China trade talks.
Spot gold declined 0.3% to 1,202.30 oz after earlier hitting its highest mark since 28 August at 1,212.49, the precious Yellow metal gained 0.7% in the prior session in its biggest single-day rise since 24 August
US gold futures for December delivery settled down 2.70, or 0.2%, at 1,208.20 oz.
“It’s a break of the correlation today between the dollar and gold. Even though the dollar is down, we’re not seeing that equate to higher prices in precious metals,” said the OPresident of world markets at TIAA Bank. “It just seems like the sentiment for the meals is very negative.”
The US Dollar (.DXY) Index declined against a basket of major currencies after data showed US consumer prices increased less than expected in August, paring traders’ outlook that domestic inflation is accelerating.
A weaker USD typically makes dollar-priced gold less expensive for holders of other currencies, but the correlation broke on Thursday.
The CPI data came after soft US wholesale price data undermined the case for a faster pace of policy tightening by the Fed. The FOMC is expected to raise benchmark interest rates at its 25-26 September meeting.
Higher rates make gold less attractive since it does not pay interest and costs to store and insure.
In trade talks
Senior U.S. officials sent an invitation to their Chinese counterparts to hold another bi-lateral trade meeting, raising speculation about a shift in Washington’s policy.
The months-long trade rift between Washington and Beijing has prompted investors to buy the USD in the belief that the United States has less to lose from the dispute. This has driven investors toward record short positions in COMEX gold and heavy liquidations in gold ETFs. The possible progress in the trade dispute pressured the USD.
Gold prices have fallen nearly 12% since a peak in April intensifying global trade tensions and under pressure from rising US interest rates.
Spot silver was flat at 14.21, earlier touching 14.34 oz, a 9-day high.
Platinum increased 0.3 to 800.74, after tapping a 1-month high at 812.30 oz
Palladium gained 0.9% to 983.50 oz
Have a terrific weekend.