Gold prices steady as U.S.-China trade concerns persist

Wednesday,   12-Jun-2019   09:09 AM (IST)

Gold prices steadied on Wednesday after touching a one-week low in the previous session, buoyed by concerns around U.S.-China trade relations amid expectations of an interest rate cut by the U.S. Federal Reserve. Spot gold was flat at $1,326.90 as of 0115 GMT, after falling to its lowest since June 3 at $1,319.35 in the previous session. U.S. gold futures were also steady at $1,330.70 an ounce. U.S. President Donald Trump on Tuesday defended the use of tariffs as part of his trade strategy, while China vowed a tough response if the United States insists on escalating trade tension amid ongoing negotiations. Trump said that he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees again to four or five “major points,” which he did not specify. He also took an aim at the U.S. Federal Reserve, saying interest rates were “way too high” and the central bank had “no clue”. Fed policymakers will meet on June 18-19 against the backdrop of rising trade tensions, slowing U.S. growth and a sharp step-down in hiring in May that have led markets to price in at least two rate cuts by the end of 2019. Asian share markets got off to a cautious start on Wednesday as the White House took a tough line on a trade deal with China, just as investors were bracing for the latest batch of economic data from the Asian giant. A drop in two-year treasury prices flattened the yield curve on Tuesday after a Labor Department report showed producer prices increased in May for the second consecutive month, pointing to a steady pick-up in underlying inflation pressures. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.03% to 756.18 tonnes on Tuesday from 756.42 tonnes on Monday.