On Tuesday, the spot price of gold was firm after showing its massive one-day percentage drop in two months in the last session. At the same time, the new trade threats of Washington against China damped investor confidence drove by a U.S.-Mexico deal.
Daniel Hynes, an analyst at ANZ, stated, “Easing trade tensions weighed on the gold market yesterday, but it hasn’t erased concerns around the U.S.-China talks.”
On the other hand, bullion declined more the 1% in the previous session to an intra-day low of $1,324.50. The fall was due to markets learned about the deal between the United States and Mexico to prevent another tariff war last week.
Also, the spot price of gold rose by 0.1%. And it is currently at $1,328.83 per ounce. Aside from that, U.S. gold futures surged by 0.3% to $1,332.90 an ounce.
Hynes stated that the worries on the trade tension between the U.S. and China resulted in the sell-off yesterday being short-lived. And several residual safe-haven buying kept the prices well supported.
Aside from that, Trump anticipates a talk with Xi at the June summit in China. However, China did not officially confirm the said meeting.
Analyst Edward Meir wrote in a note regarding the status of the spot price of gold, “We remain cautiously constructive on gold despite Monday’s decline as we have to suspect that the trend of a lower dollar and depressed global interest rates will continue to stay in place for some time, providing gold prices with some ballast.”
Meanwhile, silver rose 0.4% to $14.72 per ounce, and platinum gained 0.6% to $806.78 an ounce.
Palladium edged 0.3% to $1,378.50 per ounce.
Elsewhere, the oil was stable above $62 per barrel on Tuesday. Also, steadier equities and expectations OPEC and its partners will continue to withhold supply countered concern about weak economies and demands.
On Monday, Russia said to provide support in the extension of OPEC-led supply cuts that took place since January. Then, equities rose after China relieved financing rules to stem an economic slowdown. As a result, it gave the oil a lift.
Brent crude increased 1 cent to $62.30 per barrel. And West Texas Intermediate rose 40 cents at $53.66.
Oil broker PVM’s Tamas Varga commented about the prolonged supply curbs by OPEC and its partners, “The odds are on full agreement and co-operation between the two producers’ groups.”
Then Varga also stated, “Even planned and unintentional supply restrictions of more than 4 million barrel per day have not been able to support prices as economic considerations took over in the last two weeks.”
Moreover, the price of Brent dropped to almost 20% from its 2019 peak above$75 per barrel in April. The pressure on the economic downturn started the change in the oil demand.