Investing.com – A day can make a lot of difference in gold.
Just on Tuesday, the yellow metal’s price tanked its most in five weeks, falling below the key $1,500 level as everything seemed wrong with the safe haven. Fast-forward 24 hours and gold looks surer than ever of making a return to that bullish perch.
Gold rebounded after a lull in the phase one chorus of the purported U.S.-China trade deal that has incessantly pounded the airwaves over the past few days. A senior official of the Trump administration told Reuters that a meeting between U.S. President Donald Trump and Chinese President Xi Jinping to sign a long-awaited interim trade deal could be delayed until December, as discussions continue over terms and a venue.
By Wednesday’s settlement, for December delivery on COMEX was up $9.40, or 0.6%, at $1493.10 per ounce, putting it less than $7 from making a return to the $1,500 level. On Tuesday, December gold lost 1.8%, its most in a day since Sept. 30, to strike a one-month low of $1,480.70.
, which tracks live trades in bullion, was up $8.11, or 0.6%, at $1,491.67 per ounce by 2:30 PM ET (19:30 GMT). It settled down 1.7% in the previous session.
Gold’s plunge on Tuesday was hastened by expectations that China and the U.S. were on the cusp of concluding phase one of their trade deal, which would roll back much of the tit-for-tat tariffs.
Wall Street’s key stock indexes also moved down from their record highs of the past few days that had been driven by speculation of a quick trade deal.
“Gold prices came up on an escalator ride today after going down in an elevator yesterday as cascading sell stops from overbought conditions triggered lows to below $1,485,” said George Gero, precious metals analyst at RBC Wealth Management in New York. “The large dips have presented buying opportunities for longer-term investors.”
TD Securities concurred as much in a note, saying: “Dry-powder analysis suggests that the average gold bull continues to hold an above average position size.”
While a U.S.-China trade deal has often been cited as the one thing that can diminish gold’s allure as a safe haven, some pointed out that the precious metal would actually benefit from such an arrangement.
“A potential trade deal might not be a bad thing for gold, after all,” said Fawad Razaqzada, analyst for forex.com in London.
“One has to remember that China is a big consumer of the precious metal,” he added. “The prospects of a trade deal therefore boosts the physical demand outlook for gold both directly, and indirectly via a stronger yuan. So, I think the longer-term outlook remains supportive if you look at it from this angle.”
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.