Gold Prices Slide as U.S. Dollar Rebounds
Date | 08-01-2019 - 03:08 PM
Article Type | Forex
Region | World
Investing.com - Gold prices slid on Tuesday in Asia, as the U.S. dollar rebounded after falling for four straight sessions amid expectations that the U.S. Federal Reserve may shift its position and slow down future increases in interest rates in 2019.
Gold futures for February delivery declined 0.5% to 1,283.50 by 12:50 AM ET (05:50 GMT) on the Comex exchange.
Fed Chairman Jerome Powell on Friday said the central bank would be more sensitive to downside risks in the market, adding that it was "prepared to shift the stance of policy" if needed.
Prices of the yellow metal tend to rise when rate hike expectations ease because lower rates reduce the opportunity cost of holding non-yielding bullion.
Gold prices rose on Monday and were trading near the psychologically important $1,300 level following the news, before giving back some of its gains today.
The U.S. Dollar Index, on the other hand, gained 0.3% to 96.495.
Meanwhile, U.S.-China trade tensions returned to focus this week as officials from Washington and Beijing kicked off talks in China's capital on Monday in the first face-to-face meeting since President Donald Trump and his Chinese counterpart Xi Jinping in December agreed to a 90-day truce in their trade war.
U.S. Commerce Secretary Wilbur Ross predicted on Monday that Beijing and Washington could reach a trade deal that "we can live with".
“There’s a very good chance that we’ll get a reasonable settlement that China can live with, that we can live with, and that addresses all the key issues,” Ross told CNBC in an interview on Monday.
"There's optimism that the U.S. might reach a trade agreement with China in the next 24 to 48 hours," said Philip Streible, senior market strategist for precious metals at RJO Futures in Chicago. "That's taken a little bit of gold's momentum off, as we expect a bit of sector rotation into things like copper, soybeans, sugar and other commodities if that happens."