Gold Rises Above $1500 Amid Trade Uncertainty

Gold Rate
Gold News
Gold Rises Above $1500 Amid Trade Uncertainty

Gold Rises Above $1500 Amid Trade Uncertainty

Last updated: October 8, 20195:26 IST By: Cihad Aydın, Emtia Analisti

After pulling back due to stronger dollar yesterday, gold prices recovered and increased back above $1,500 on Tuesday amid ongoing trade uncertainty. As it is unlikely to see a major progress in trade talks later this week, trade optimism faded due to the US announcing that it blacklisted eight Chinese tech company. On economic data side, data released today showed services sector in China showed the worst growth performance in seven months in September. In Germany, where the economy is suffering from ongoing contraction in manufacturing sector, industrial production unexpectedly increased in August, which led to optimist expectations that the economy might be able to avoid another contraction in the Q3.

Even though yellow metal was weighed on by stronger dollar yesterday, growth worries and trade uncertainty kept supporting the precious metal and gold prices increased above $1500 on Tuesday.

As of 14:50 GMT+3, spot gold was trading at $1,504.77 an ounce while dollar index was at 98.91. US 10-year Treasury yield was down to 1.526.

UBS director of commodities Dominic Schnider said on Bloomberg that the rally in gold not yet ended and speculative positioning increased while adding that any pullback in the prices would be a buy opportunity.

It is unlikely to see any major progress in trade talks later this week, which lowered optimist expectations while uncertainties increased due to the US announcing that it blacklisted eight Chinese tech companies. Same precautions applied to Huawei before will be this time applied to some top Chinese tech companies that are producing artificial intelligence and surveillance technologies and they won’t be able to buy American technology without government approval.

On economic data side, data released today showed that services sector in China performed the worst in seven months in September. According to the data, Caixin services PMI fell to 51.3 from 52.1 and highest increase in new orders since January 2018 could not prevent the decline. In the report, it was stated that increasing operational costs alongside with volatility in exchange rate lowered business confidence and more government stimulus would be needed to prevent further slowdown in the economy.

In Germany, where the economy is suffering from ongoing contraction in manufacturing sector, industrial production unexpectedly increased in August, which led to optimist expectations that the economy might avoid another contraction in the Q3. According to the data, industrial production increased 0.3% and July’s data was revised from -0.6% to -0.4%. Economy Ministry said this was due to increase in intermediary and capital goods production. Even if this is a good sign, German economy is expected to shrink again in the Q3 due to ongoing contraction in manufacturing sector starting to have an impact on labor market in an economy that is under pressure by trade dispute, global economic slowdown and Brexit uncertainty.

Gold Rises Above $1500 Amid Trade Uncertainty

Important breaking news email for major happenings about gold

Recommended for you:

Gold Manages To Hold Above $1500, Global Outlook Darkens

Gold Pushes Through $1,270

Gold Falls Due To Profit Taking After Rising Sharply Amid Trade Tensions

Gold Slipped From Two-Week High While Dollar Weakened After Fed Minutes

Gold Rises Amid Escalating US-Sino Trade Tensions

Gold Trades Rangebound Amid IMF’s Growth Warning

Gold Holds Above $1500 Ahead of US Non-Farm Payrolls

Gold Dips Slightly, As Global Stock Prices Sag

Now is the Best Time to Shop for Gold In Dubai

Gold Steady Ahead Of Fed Statement