AGE Daily Gold Update

AGE Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.

11/5/2019: Gold tumbles on tariff hopes

Source: Bill Musgrave, American Gold Exchange

Austin — Gold lost 1.8% to close at a three-week low under $1,484 as trade war hopes and stronger US data boosted global risk appetite, undercutting demand for safe havens.

The US is planning to roll back 15% tariffs on $112 billion in Chinese imports to sweeten the pending trade deal, according to reports in the Wall Street Journal and Financial Times. In exchange, China would have to make new concessions on protections for US intellectual property.

Affecting items like appliances, flat screen TVs, and clothing, the reduction would accompany the postponement of 5% in added tariffs on $250 billion in other Chinese goods. For its part, China would also agree to buy some $60 billion in US farm products. US Commerce Secretary Wilbur Ross said yesterday that this portion of the trade pact, called "phase one," may be signed this month.

The Global Dow rose 1% on hopes that a pact between the world's two largest economies will help to reverse the trend of slowing global growth. US equities were more muted, with the Dow adding 0.3% and the Nasdaq less than 0.2%. US Treasury yield climbed sharply with the rise in risk appetite.

The dollar jumped 0.5% against major rivals as investor shifted away from safe-haven currencies like the yen and Swiss franc for a second day. A stronger dollar pressures gold and other commodities by making them more expensive overseas.

Also supporting stocks and the buck, the ISM services index rebounded in October after falling to a three-month low in September. New orders and employment both grew as businesses became less concerned about the trade war.

The other precious metals were also lower, with silver plunging 2.8% while platinum and palladium slid 0.9% and 0.4%, respectively.

At the Comex close: December gold lost $27.40 to $1,483.70; December silver fell 50 cents to $17.57; January platinum dropped $8.10 to $930.60; and December palladium slid $6.10 to $1,746.70 an ounce.