Comments from Trump that auto tariffs are to be delayed for six months pushed equity markets higher, which is pressuring gold, said Bob Haberkorn, senior market strategist at RJO Futures.
Gold prices eased on Wednesday as U.S. President Donald Trump’s announcement to delay tariffs on auto imports improved risk sentiment, but lingering concerns about global growth limited losses for the metal. Spot gold was down 0.1% at $1,295.42 per ounce as of 11:27 a.m. EDT (1527 GMT). U.S. gold futures were mostly unchanged at $1,296.20 an ounce.
Comments from Trump that auto tariffs are to be delayed for six months pushed equity markets higher, which is pressuring gold, said Bob Haberkorn, senior market strategist at RJO Futures. “(However), there are lot of irons in the fire from a geo-political standpoint. Iran is a part of it, but the main one is the U.S.-China trade talks, which doesn’t seem to be going anywhere at this point.”
Concerns that the trade dispute between two world’s biggest economies could be protracted and may impact the global economy have boosted bullion’s appeal over the past couple of days. The metal, often seen as an alternative investment during times of political and financial uncertainty, rose to its highest level since April 11 at $1,303.26 on Tuesday.
Investors were also keeping a close eye on escalating tensions between the United States and Iran. Saudi Arabia said armed drones struck two of its oil pumping stations on Tuesday, two days after the sabotage of oil tankers near the United Arab Emirates, and the U.S. military said it was braced for “possibly imminent threats to U.S. forces in Iraq” from Iran-backed forces.
“Treasuries are still going higher which shows that there is safety buying going on,” Haberkorn added. Treasury yields fell on Wednesday morning, with the two-year yield at its lowest in 15 months as traders raised bets on a Federal Reserve rate cut after U.S. retail sales missed expectations.
U.S. retail sales unexpectedly fell in April as households cut back on purchases of motor vehicles and a range of other goods. Another report showed declining output of cars and machinery led to a surprise fall in U.S. factory production for April.
“We expect that the growing risks of deterioration in the U.S. data, for which the trade war could be a near-term catalyst, will prompt money managers to grow their allocations to the yellow metal,” TD Securities analysts wrote in a note. On the technical side, the $1,300 barrier will prove a crucial pivot for bullion, analysts said. Among other precious metals, silver was steady at $14.78 an ounce, while platinum fell 1.1% to $846.05. Palladium rose 0.3% to $1,340.25 an ounce.