Investing.com – President Donald Trump seems to have read the minds of his Chinese negotiators and pushed a trade deal with Beijing beyond 2020, sending gold to four-week highs on Tuesday as risk-averse investors scurried for a hedge.
Gold futures for February delivery on New York’s COMEX settled up $15.20, or 1%, at $1,484.40 per ounce. It earlier hit a high of $1,487.65, its highest level since Nov. 7.
Spot gold, which tracks live trades in bullion, was up $15.43, or 1.1%, at $1,477.77 by 3:10 PM ET (20:10 GMT). Its intraday peak was $1,481.90, also the highest since Nov. 7.
“Gold made solid gains after Trump’s commentary that there is no deadline on the trade deal and it may have to wait until after the election,” said Eric Scoles, precious metals strategist at RJO Futures in Chicago.
Trump, speaking in London ahead of a NATO gathering, said he was alright heading into the 2020 election with the U.S.-China trade war unresolved.
“I don’t have a deadline,” the president said. “I like the idea of waiting until after the election for the China deal.”
U.S. Commerce Secretary Wilbur Ross later said that delaying talks with China beyond 2020 may deprive Beijing of the advantage it thinks it has in squeezing Trump for a settlement in its favor before the election.
Scoles said gold also appeared to benefit from Trump’s remarks on Monday that he was implementing tariffs for all steel and aluminum imports from Brazil and Argentina.
Yet he warned that the gains in gold could be fleeting as the stock market had not crashed on Trump’s latest stance on China.
“Despite strongly negative headlines U.S. equities have rejected the lows and are holding support, suggesting anxiety levels are not running too high,” Scoles said. “Gold prices have, therefore, come off their highs and resting just below a resistance point.”
“There is likely to be some follow-through in tomorrow’s trading session. However we may not see a serious rally as the conversation on trade can change at any moment.”