Gold drops in overnight trading, recovers in US on renewed China ‘pessimism’ over trade talks
Gold drops in overnight trading, recovers in US on renewed China ‘pessimism’ over trade talks by Michael J Kosares for USA Gold
Gold weakened overnight on fresh press reports over the weekend that the US and China had “constructive discussions on each other’s concerns.” At one point, it was down over $10 (at $1456.50). Those constructive discussions seem to have gone awry since then, though, with a new CNBC report this morning that the mood in Beijing had become “pessimistic” about the trade talks. Gold responded accordingly at the COMEX open. It is now priced at $1467 – down $1 on the day. Silver is trading at $16.93 – down 2¢ on the day.
James Hierczyk hinted at the possibility of a pendulum swing to the negative in a report posted at FXEmpire earlier this morning. “Today’s reaction to the news is understandable since prices rose last week when the headlines read that the trade deal negotiations had hit a snag,” he noted. “Although the selling pressure is strong early Monday, there are still skeptics out there who cite the lack of details from the U.S. and China officials as reasons to remain cautious about the remarks. The daily chart pattern reflects this tentativeness.” Saxo Group’s Ole Hansen was similarly cautious about the trade talks in a report posted over the weekend. “Most recently Larry Kudlow, the White House economic adviser, said negotiations on a first phase deal had entered the final stages,” he wrote in a report posted at the bank’s website. “We are however concerned that the eventual result may struggle to live up to market expectations. Further uncertainty lies ahead with the low point in U.S. and Chinese growth most likely still in front, not behind us.”