12 June, 2019
Gold prices traded higher on Wednesday at 1332.45 during the Asian session after hitting a one-week low in the previous session, as worries over U.S.-China trade war flared up, curbing risk appetite and increasing the appeal of safe-haven bullion. Risk sentiment turned cautious as both sides in the Sino-U.S. trade tussle engaged in another round of heated exchanges. U.S. President Trump defended the use of tariffs, while China vowed a tough response if Washington insists on escalating trade tensions amid ongoing negotiations. Trump also emphasized that he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees again to four or five “major points,” which he did not specify. Gold bulls are also optimistic of an interest rate cut by the U.S. Federal Reserve. Trump, a long-term advocator of rate cuts, said on Tuesday interest rates were “way too high”. Fed policymakers will meet on June 18-19 against the backdrop of rising trade tensions, slowing U.S. growth and a sharp step-down in hiring last month that have led markets to price in at least two rate cuts by the end of 2019.