Gold hangs near six-year high after dipping a bit due to a stronger dollar and some profit taking in early morning trading. Silver continues its upward trend, hitting a more-than-two-year high in early morning hours.
Front-month December futures settled at $1,551.80 an ounce Tuesday on Comex as investors continued to seek a safe haven amid uncertainty over the U.S.-China trade war and fears of an economic recession. Speculation that the Federal Reserve will cut interest rates in September and negative bond yields have also spurred the rally in the yellow metal. Currently, the December contracts are at $1,546.50, down $5.20.
The same factors pushed up silver, whose rally has outpaced gold’s so far this week. The September contract settled at $18.153 an ounce on Tuesday, up 6% in two days. It breached $18 for the first time in almost two years. The December contract, which is becoming the front month, settled at $18.298 an ounce. Currently, the September contract is at $18.235, up $0.082.
U.S. President Donald Trump said Monday at the G77 summit in France that Chinese officials had called U.S. negotiators wanting to resume talks, but China’s foreign ministry denied that there had been any calls and reiterated that on Tuesday.
Meanwhile, economic reports Tuesday showed Germany’s economy contracted in the second quarter on weaker exports. And the Case-Shiller home price-index showed the slowest U.S. growth in almost seven years in June.
Investors will next look for revised U.S. second-quarter GDP numbers due out on Thursday, along with weekly jobless claims. U.S. inflation and consumer-spending data for July are scheduled for release Friday. They also continue to watch for signals on what the Fed will do to interest rates at its Sept. 18 meeting.
The CME FedWatch Tool put the odds that the central bank will reduce interest rates by 25 basis points at 95% early Wednesday, while the chance of a 50-basis-point cut was 5%. The 10-year Treasury yield stayed below 1.50% early Wednesday, near a three-year low.
Spot platinum was higher early Wednesday, after advancing 1.2% Tuesday. Spot palladium was lower early Wednesday. It added less than 0.1% on Tuesday.
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