May 10, 2019
Gold prices edge up after U.S. tariff hike takes effect
(Reuters) - Gold prices edged higher on Friday, drawing support from increased trade tensions after U.S. President Donald Trump's tariff increase on $200 billion worth of Chinese goods took effect, putting the bullion on track for a weekly gain.
Spot gold was up 0.2% at $1,286.25 per ounce at 0450 GMT and is up about 0.6% for the week.
U.S. gold futures were steady at $1,286.90 an ounce.
U.S. President Donald Trump's tariff increase to 25 percent on $200 billion worth of Chinese goods took effect on Friday, and Beijing said it would strike back, ratcheting up tensions as the two sides pursue last-ditch talks to try salvaging a trade deal.
Top U.S. and Chinese trade negotiators concluded the first of two days of talks on Thursday to rescue a trade deal that is close to collapsing as Washington goes ahead with plans to hike
tariffs on hundreds of billions of dollars of goods imported from China.
"There is still some level of uncertainty surrounding the U.S.-China trade deal, and when gold tends to go down there seems to be opportunistic buying," said John Sharma, economist at National Australian Bank.
The metal had fallen to its lowest since the end of December late last week, but has since risen nearly 1.6%.
However, climbs in gold have been somewhat muted despite broad risk-aversion in the market, with other safe-havens such as the yen and Swiss Franc gaining.
"A lot of the (influence form) trade talks was priced in,and for gold to rise more sustainably we need to see some more weakness in the (broader financial) market," said Sharma.
"There was some concern about global growth, but there still hasn't been any news that confirms the economy is going to be much slower."
Gold was also facing a barrier around $1,290 levels, restricting buying from traders who follow technical charts, analysts said.
"Support (for gold) remains evident around $1,280, while $1.290-$1,295 sees resistance. The yellow metal is continuing to see interest around $1,280 levels," MKS PAMP Group said in a
Spot gold is targeting a range of $1,267-$1,274 as it failed to break resistance at $1,291 per ounce, according to Reuters technical analyst Wang Tao.
Meanwhile, palladium rose 1.5% to $1,313 an ounce, having fallen over 4% in the previous session to its lowest since Jan. 4 at $1,263.85. The metal is still on track for its second straight weekly decline.
Silver edged up 0.2% to $14.78 per ounce, while platinum rose 1.5% to $856.
Silver is on course to register a second straight week of declines, while platinum looks set for a third weekly drop in a row.