Gold futures fell Thursday. heading for back-to-back losses after the haven metal scored a nearly six-year high early in the week.
The impending sideline meetings at the Group of 20 conference in Japan between U.S. President Donald Trump and his Chinese counterpart Xi Jinping held the attention of financial markets, which had been supportive for gold in recent sessions.
Analysts at Zaner Metals “suspect volatility in the gold market might begin to moderate as the market slows its profit-taking liquidation wave and waits for the outcome of the Saturday trade meeting between the U.S. and China.”
“The consensus impact from the meeting is likely to trumpet coordinated support for the global economy, and that should be supportive of gold when the markets return to action on Monday,” they said in a daily note.
August gold
GCQ19, -0.54%
was down $9.20, or 0.6%, at $1,406.20 an ounce. Prices had settled at $1,418.70 Tuesday, the most robust settlement price for a most-active contract since Aug. 28, 2013, according to FactSet data.
Read: Why gold prices have climbed to their highest since 2013
Trump and Xi will use the G-20 meeting this weekend to “press pause” on their continuing trade war, analysts have said. Early Thursday, reports said China had set the terms for the negotiations. The Wall Street Journal reported that Xi will present President Donald Trump terms, focused in part on easier treatment of the controversial Huawei Technologies Co.
The demands raise some doubts that the two sides can achieve a detente and comes after a report from the South China Morning Post that a tentative U.S.-China truce had been achieved.
“Gold continues to soften after its euphoric surge” as many investors “grow cautiously optimistic that positive developments will come out of… the Trump and Xi meeting at the sidelines of the G-20 meeting in Osaka. The key to the deal may be if Trump lifts part of the ban on Huawei in exchange for seeing Xi deliver changes to Chinese law to help enforce other parts of the trade deal,” said Edward Moya, senior market analyst with Oanda.
Stocks were reflecting some nervousness ahead of the meetings, though U.S. benchmark stock indexes were trading a bit higher in Thursday dealings. Read Market Snapshot. Gold also fell as the leading dollar index
DXY, +0.01%
held steady.
“The yellow metal could see further weakness if the two nations come closer to outlining this weekend, but should see long-term investors buy the dip on expectations of global easing efforts from central banks across the world,” Moya added.
Expectations for lower interest rates among global central banks and geopolitical concerns centered on trade spats and tensions with Iran had been making gold a preferred investment this spring, especially as competing low-risk U.S. Treasury bond yields dropped. The yield on the 10-year note
TMUBMUSD10Y, -0.80%
fell below 2% in recent sessions.
Read: How to get started with gold-coin investing
In other metals trading, the most-active September silver contract
SIU19, -0.85%
fell 12.5 cents, or 0.8%, to $15.25 an ounce and September copper
HGU19, -0.39%
shed 0.2% to $2.712 a pound. July platinum
PLN19, -1.04%
fell 0.7% to $810.70 an ounce, while September palladium
PAU19, +0.01%
fell nearly 0.1% to $1,524.50 an ounce.
Among exchange-traded funds, SPDR Gold Shares
GLD, -0.28%
fell 0.5%.
Source : MTV
