Gold Drops After Getting Boost From Trump New Round of Tariffs

Friday, 2 August 2019 16:02 WIB



Gold fell from near a six-year high after Beijing pledged to respond if U.S. President Donald Trump adds extra tariffs to Chinese imports.

Prices retreated after posting their biggest gain in a month on Thursday as Trump said that he would impose a 10% tariff on a further $300 billion in Chinese imports from Sept. 1. The levies will come on top of the 25% duty already in place on some $250 billion in Chinese goods. China will have to take necessary countermeasures if the U.S. goes ahead with the plan, Foreign Ministry spokeswoman Hua Chunying said in Beijing on Friday.

Bullion has been whipsawed this week after Federal Reserve Chairman Jerome Powell struggled to define the path ahead for U.S. rates following the first cut in more than a decade. While Powell’s comments damped expectations for a lengthy easing cycle and weighed on gold, news of the fresh tariffs boosted the haven asset on concerns that global growth will be further hurt. Friday’s decline is due to some profit-taking after the surge on Thursday, according to Brian Lan, managing director of Singapore-based GoldSilver Central Pte.

Elsewhere in Asia, South Korea warned Japan it would be responsible for repercussions from its unprecedented decision to remove Seoul from a list of trusted export destinations and said it would take Japan off its easy-trade list. Owning gold has become more attractive for investors as a haven amid geopolitical uncertainty and as the tariff threats will have a negative impact on growth forecasts, said Alfonso Esparza, senior market analyst at Oanda Corp.

Spot gold fell 0.7% to $1,435.13 an ounce at 8:19 a.m. in London, after earlier rising to $1,448.40, near the six-year high of $1,453.09 touched on July 19. Prices are heading for a third weekly gain in four. Holdings in bullion-backed exchange traded funds rose by 6 tons to the highest since April 2013, according to data compiled by Bloomberg.

Source : Bloomberg




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