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Gold stands still on hopes for US-China trade talks
On Thursday, gold stood still against the backdrop of news of probable US-China trade negotiations, although the yellow metal was held down by a firmer evergreen buck.
December delivery gold futures rallied by 0.07% being worth $1,211.70 a troy ounce.
America is proposing another round of trade negotiations with China in an attempt to avert fresh levies.
American leader has threatened to slap duties on nearly all China’s goods, or approximately $467 billion in products, while China wants to ask the WTO for the official permission to slap sanctions on its trade partner at a gathering next week.
A long-lasting trade feud between China and American kept driving market participants to purchase the evergreen buck, thus suppressing the yellow metal because investors feel that America has less to lose in this trade conflict. Gold has been stuck in the $1,200 band for the last two weeks because traders shift to the safe-haven appeal of the US currency.
As a rule, the yellow commodity inches down each time the American dollar jumps because it’s simply denominated in this currency, therefore, it can’t neglect any changes in the value of the evergreen buck. The yellow metal becomes more costly for those who keep other currencies when the evergreen buck tacks on, and accordingly more affordable when it dives.
Market participants are also awaiting consumer prices data a bit later in the day for further clues on the key US bank’s monetary policy. The given data is expected to show up just a day after a sudden sink in producer prices. However, the Federal Reserve is generally anticipated to have rates raised already this month.
Estimating the greenback’s purchasing power against a pack of its primary counterparts the USD index inched up by 0.12% trading at 94.93.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.