Gold prices edged down on Tuesday in Asia as equities recovered after plunging the previous day on U.S. President Donald Trump’s threat to hike tariffs on Chinese goods.
Gold contracts for June delivery, traded on the Comex division of the New York Mercantile Exchange, slipped 0.1% to $1,282.85 per ounce by 1:43 AM ET (05:43 GMT).
The precious metal received some support yesterday as Asian equities plunged, with Chinese stocks down more than 5%, after Trump said he was not happy with the progress in trade talks with China and that the U.S. will increase tariffs on $200 billion worth of Chinese goods to 25% from the current 10% this Friday.
The precious metal is often used by investors to hedge against economic and political instability.
“There are significant catalysts for gold with the escalations on the trade-war front yesterday, but it is surprising we have not seen a significant follow through,” said Stephen Innes, head of trading and market strategy, SPI Asset Management, in a Reuters report.
“Some are also focusing on the tensions in the Middle East and the two catalysts are sufficient enough to hold prices but there is a general reluctance to push prices higher over $1,285,” Innes added.
Asian stocks recovered today after reports suggested a Sino-U.S. trade deal is still not off the table. U.S. Trade Representative Robert Lighthizer confirmed that Chinese Vice Premier Liu He will still lead a delegation to go to the U.S. for trade talks this week.
Comments by Treasury Secretary Steven Mnuchin who said the U.S. would reconsider the duties if talks get back on track raised hopes that the two sides might still be able to reach a trade deal.
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