Gold Price Slightly Lower as US Redrafts NAFTA

August 28, 2018

New York (Aug 28)  Gold prices were lower on Tuesday, despite a weaker dollar, as trade tensions between the U.S. and China lingered.

Comex gold futures for December delivery fell 0.16% to $1,214.10 a troy ounce as of 10:33 AM ET (14:33 GMT).

The U.S. and Mexico reached a trade deal on Monday that would replace the North American Free Trade Agreement (NAFTA). U.S. Treasury Secretary Steve Mnuchin said on Tuesday he thinks the U.S. will also reach a deal with Canada this week. Canada had been left out of negotiations since July. But U.S. President Donald Trump warned he could still put tariffs on Canadian autos if they refused to agree to the new deal.

Despite the trade progress in North America, worry remains over trade between the U.S. and China. Officials from both countries are expected to meet later this month to resume trade negotiations after the last round of trade talks ended with little progress. The U.S. imposed tariffs on $16 billion of Chinese goods on Aug. 24, with China issuing reciprocal tariffs and threatening to file a complaint with the World Trade Organization.

The price of gold was unmoved by a softer greenback. The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, inched down 0.13% to 94.55.

Gold usually falls as the dollar rises, as it is denominated in the U.S. currency and is sensitive to moves in the dollar. Bullion becomes more expensive for holders of other currencies when the dollar rises and cheaper when it falls.

Other metals were mixed on the Comex, with silver futures down 0.50% to $14.785 a troy ounce. Among other precious metals, platinum futures fell 0.63% to $799.10, while palladium futures decreased 0.22% to $935.40 an ounce. Copper futures surged 0.70% to $2.751 a pound.


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