Gold Fell As US Greenback Gained Strength For Third Consecutive SessionGold prices dropped on Wednesday morning as the dollar firmed against the yuan after the United States threatened to impose additional tariffs on Chinese goods, escalating trade tensions between the world’s two largest economies.
While dovish NFP data resulted in US dollar taking a bearish hit, the greenback has managed to slowly but steadily regain its strength and has been moving up against major global counterparts for the third consecutive session as visible from a look at daily charts. XAUUSD pair is currently trading at $1253.19 with 0.19% decrease in value.
The Trump administration raised the stakes in its trade dispute with China, threatening 10 percent tariffs on a list of $200 billion worth of Chinese imports. The news comes after Washington imposed 25 percent tariffs on $34 billion of Chinese imports last week. Beijing responded immediately with matching tariffs on the same value of U.S. goods exported to China. U.S. gold futures for August delivery were 0.3 percent lower at $1,252.30 an ounce.
A firmer greenback makes bullion expensive for holders of other currencies as the commodity is priced in dollars. It’s risk-off and that put the dollar on the front foot and triggered commodities lower. However Silver has remained on neutral stance with the price of XAGUSD pair currently above $16 mark. While safe-haven precious metals lack demand the pair has managed to hold its price level as the selling activity surrounding silver has been very less across the week.
Oil prices cooled on Wednesday after US secretary of state Mike Pompeo said oil sanctions waivers may be granted to countries seeking relief from tough White House measures against Iran set to start in November. Brent crude, the international benchmark, was down 1.3% at $77.83 a barrel in early Asia-Pacific trading.
West Texas Intermediate, the key US price, shed 0.9 % and is trading at $73.49 per barrel. Mr. Pompeo’s comments marked the first time a senior administration official has said the US could waive sanctions, in the wake of efforts from a series of US teams dispatched by Washington to more than a dozen countries to seek their compliance with sanctions that are aimed at pressuring the regime in Tehran. China, India, and Turkey are among oil importers that have suggested they may not heed US measures. And the top US diplomat stressed that any country not granted waivers would still be liable for hefty penalties.