Gold Sees Unexpected Rally As Trade Fears Subside — MasterMind Update

MasterMind Update – The yellow metal (Gold) received a well-deserved boost early in the session, with the U.S. dollar index pulling back to 94.74 and pushing the December Comex gold futures to $1,213.10, up 0.91% on the day.

“What we’ve seen is that gold prices have been depressed because of the angst surrounding trade fears and the repercussions on the FX markets that flow through that,” TD Securities commodity strategist Daniel Ghali told Kitco News.

“Late this early session we had some comments that the U.S. is looking to resume negotiations with China on the trade front and that has bolstered metal prices across the board,” Ghali added.

Earlier on Wednesday, The Wall Street Journal reported that Washington has pushed for a new round of trade talks with Beijing before introducing additional tariffs against Chinese imports.

This comes after U.S. President Donald Trump said last week that his administration was getting ready to finalize an additional $200 billion worth of tariffs on Chinese goods.

Improving trade relations between U.S. and China is a much-needed step for gold prices, which have suffered this summer, said Kitco’s senior technical analyst Jim Wyckoff, adding that the market needs to see better precious metals demand coming from China.

“The ideas that the world’s two largest economies may be moving closer to a trade agreement can be extrapolated to mean an eventual trade agreement would produce more U.S.-China commerce and in turn see better demand for precious metals coming from China,” Wyckoff explained.

RBC Wealth Management managing director George Gero also pointed to the U.S. dollar movements as well as possible inflation on the commodity front as the reasons for gold’s gains.