The price of gold fell below $3,300 per troy ounce overnight, after it rose above the $3,400 mark on Tuesday, marking its highest level since reaching a record high two weeks earlier, Commerzbank’s commodity analyst Carsten Fritsch notes.
US and China trade talks are due this weekend
“The fall was triggered by news indicating movement in the trade conflict. The first talks between high-ranking representatives of the US and China are due to take place in Switzerland this weekend. In addition, a trade agreement between the US and the UK was announced on Thursday.”
“The negative price reaction shows how strongly gold was previously driven up by the tariff conflict triggered by US President Trump and what could be expected if agreements are reached that lead to a reduction or withdrawal of tariffs. This is particularly true in the case of an agreement between the US and China.”
“The fact that Fed Chairman Powell put a damper on hopes of early interest rate cuts by the US Federal Reserve at the press conference following the Fed meeting on Wednesday is also likely to have caused headwinds for gold. Criticism of Powell from US President Trump was not long in coming, whereupon gold briefly rallied yesterday.”
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