Gold at one-week high as trade talk hopes fade

Thursday,   10-Oct-2019   09:02 AM (IST)

Gold prices scaled a one-week peak on Thursday as diminishing hopes of progress at the ongoing Sino-U.S. trade talks sent stock markets lower and prompted investors to seek bullion’s safety. Spot gold rose 0.4% to $1,511.24 per ounce as of 0049 GMT. U.S. gold futures GCcv1 gained 0.3% to $1,516.50. Asian stocks dropped, with MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.1%. The United States and China made no progress in deputy-level trade talks held during Monday and Tuesday in Washington, the South China Morning Post reported, with Chinese delegation planning to leave Washington on Thursday, instead of Friday, as earlier planned. Hopes of a breakthrough in trade talks had dwindled earlier this week after the U.S. government widened its trade blacklist to include some of China’s top artificial intelligence startups, punishing Beijing for its treatment of Muslim minorities and ratcheting up tensions. The talks were to take place ahead of a scheduled increase in U.S. tariffs on $250 billion worth of Chinese goods, to 30% from 25% on Oct. 15. U.S. job openings fell to a 1-1/2-year low in August and hiring declined, suggesting employment growth was slowing largely because of ebbing demand for labour as the economy loses momentum. A 15-month trade war between the two countries has hurt business confidence, leading to a retrenchment in business spending and a downturn in manufacturing. The trade war has fanned financial market fears of a recession. U.S. Federal Reserve Chair Jerome Powell on Tuesday flagged openness to further rate cuts to fend off global economic risks. The minutes showed most Fed policymakers supported the need for an interest rate cut in September. Elsewhere, Newmont Goldcorp said on Wednesday a blockade that began on Sep. 14 at its Penasquito gold mine in Mexico has been lifted, though operations remained temporarily suspended.