Gold prices soared in the international market over the indecisive round of trade talks between the United States and China.
The Gold Spot rose from the level of $1279.69 (Day’s low on 9th May 2019) to the current high of $1286.97 (as on 10th May 2019 GMT-4 2:36 AM). The United States President Donald Trump finally moved ahead with his threat to raise the tariff on Chinese goods from 10 per cent to 25 per cent and increased it on $200 billion worth of Chinese goods, which in turn, dented the trade relationship between the two significant global economies.
The additional tariff took place at 12:01 AM (as on 10th May GMT-4 Washington Time). The Chinese officials further mentioned in a statement post the tariff increase that they deeply regretted the decision of the United States and mentioned that China would retaliate over it.
The dollar prices took a jab and fell from the level of 97.69 (Day’s high on 9th May 2019) to the present level low of 97.34 (as on 10th May 2019 GMT-4 2:45 AM). The plunge in dollar prices further inched up the demand of the safe-heaven and provided impetus to the prices in the global market.
In the global currency pair, the Chinese yuan gained sharply as compared to the U.S. dollar prices. The USD/CNY plunged from the level of RMB 6.8307 (Day’s high on 9th May 2019) to the present level of RMB 6.8020 (as on 10th May GMT-4 3:03 AM). Likewise, the yuan gained and recovered from the level of US$0.1464 (Day’s low on 9th May) to the present high of US$0.1471 (as on 10th May GMT-4 3:03 AM).
The observation in the currency movement signifies that China is estimated by the market participants to have an advantage or the upper hand in the current scenario of the bilateral disagreement between the two countries.
The uptick in gold prices and an expensive valuation increased its leverage against silver prices. The Gold-Silver ratio surged from the level of 86.29 (Day’s low 9th May 2019) to the current high of 87.01 (as on 10th May GMT-4 3:24 AM).
Australian Gold Movement:
The global cues coupled with the downgrade of the economic forecast of the country by the Reserve Bank of Australia ignited the gold prices in Australia. The prices recovered from the level of A$1820.28 (Day’s low on 7th May 2019) per ounce to the present high of A$1841.60 (as on 10th May 2019, AEST 4:59 PM).
The domestic currency gained over the decline in the United States dollar prices. The currency pair AUD/USD rose from the level of US$0.6964 (Day’s low on 9th May 2019) to the present high of US$0.7018 (as on 10th May 2019, AEST 5:13 PM).
On the data front, the U.S. Weekly Unemployment Claims increased and stood at 228k (for the week ended 5th May), against the market expectation of 215k, and previous 230k. The decline in job creation further supported gold prices.
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