Trade tensions between the US and China eased on Monday with gold slipping from its mid-February 5 week high.
Asian markets bounced back up on Monday, following Friday’s slump on trade war jitters by investors. Positive developments between the U.S. and China on trade related issues and reports that the two super powers were quietly negotiating saw markets rising sharply on Monday.
Fears last week of a looming trade war by investors, saw gold hit a five week high but following reports that the two countries were in talks, gold inched lower.
In afternoon trading in London Gold was trading at $1,347.92 a troy ounce.
Spot gold fell 0.1 percent at $1,346.01 an ounce.
U.S. gold futures fell 0.3 percent to $1,346.3 an ounce for April delivery.
Traditionally, when markets are volatile, traders seek safety in safe haven gold.
Sam Laughlin, a trader at MKS said that fears were extinguished by market participants taking profits before key resistance levels during Asian bullion trade on Monday.
Earlier in the month President Trump imposed steel and aluminium import tariffs on China. China then proposed taxes on 128 U.S. products which they said they would target.
China, according to news reports has offered to purchase U.S. semiconductors in order to alleviate its trade surplus with the States.
Unnamed sources are reportedly saying that China was asked by the U.S. to cut tariffs on U.S. autos and allow the U.S. greater access to the Chinese financial sector.
A Singapore trader said that the list of tariffs are narrowing, while Peter Navarro, trade advisor at the White House said that he was optimistic that the two sides would work out the issues.
The Dow Jones industrial average gained 669.40 points closing at 24,202.60 reversing the losses seen on Friday U.S. Stocks.
Silver gained 0.2 percent to $16.55 an ounce.
Platinum climbed 0.3 percent to $949.80 an ounce.
Palladium fell 0.1 percent to $976 per ounce.
Focus by Investors
Focus now is on President Trump’s new appointee John Bolton as national security advisor after Yemen Houthi militia fired rockets into Saudi Arabia sparking fresh tensions in the Middle East. Reports in the press say that he has provoked strong reactions around the world after he allegedly backed the use of military force in Iran and North Korea.