Gold slid 0.1 percent on Tuesday over deepening global trade tensions. Spot gold fell 0.1 percent at $1,199.40 per ounce, while U.S. gold futures slipped to $1,206 an ounce falling 0.1 percent.
So far this year gold prices have fallen around 8 percent on the back of global trade disputes and the rising U.S. interest rates with investors turning to safe havens such as the U.S. dollar.
On Monday the U.S. dollar rose to near a one week high with a continued sell off in emerging markets as global trade tensions intensified.
The dollar index which measures the greenback against a basket of six major currencies was trading at 95.182.
Data on Friday from the U.S. Commodity Futures Trading Commission (CFTC) showed that COMEX gold contracts for the week Aug. 28 were cut by Hedge funds and money managers for the first time in more than a month.
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Spot Gold has become increasing popular because of its volatility, the XAU/USD can be bought or sold based on the physical price. It is influenced by the U.S. dollar and the supply and demand of the commodity.
The price of silver is heavily influenced by movements in the XAG/USD spot commodity pair. It is used in jewellery and consumer products and can be bought or sold based on the physical price.
Escalating Trade Tensions
U.S. President Donald Trump warned Congress on Saturday not to meddle in the trade negotiations after saying that there was no need to keep Canada in the North American Free Trade Agreement.
The escalating trade conflict between the U.S. and China saw markets nervous after the planned move to impose tariffs of $200 billion on Chinese imports by U.S. President Donald Trump.
Focus on Argentina
Global attention on emerging markets was once again the focus on the growing turbulence in Argentina following the announcement by President Mauricio Macri of new taxes on exports. In an effort to balance next year’s budget he also announced plans to cut government spending in what he termed ‘emergency’ measures.
Also on Monday the central bank in Turkey reportedly said that they would take steps to curb price stability in what they see as significant risks. Market participants believe that they might hike interest rates following his comments.
Reports that a takeover of platinum producer Lonmin by Sibanye-Stillwater, precious metals producer will be supported by South Africa Public Investment Corp (PIC).
Perth Mint said on Monday that there was a rise in the month of August of sales of gold products with the lower prices of bullion attracting buying.
Other Precious Metals
Spot silver fell 0.4 percent to $16.55 an ounce.
Palladium rose 0.6 percent to $934.60 an ounce.