The price of gold surged to more than five-week highs on Wednesday. U.S. stocks plunged over trade-deal uncertainty. Risk sentiment wavers following ‘hawkish rate cut’ from the Federal Reserve on Tuesday. The price of gold catapulted to five-week highs on Thursday after Chinese officials poured…
The price of gold catapulted to five-week highs on Thursday after Chinese officials poured cold water on trade-deal euphoria, sending the Dow and broader U.S. stock market tumbling.
Gold for December delivery, the most actively traded futures contract, peaked at $1,516.70 a troy ounce on the Comex division of the New York Mercantile Exchange. That was the highest level since Sept. 24. The precious metal continues to trade near intraday highs, having gained $18.50, or 1.3%.
December silver futures also rallied sharply, gaining 26 cents, or 1.5%, to $18.13 a troy ounce.
The gold-silver ratio that is used by investors to determine when to buy and sell precious metals edged down 0.3% to 83.40.
The Dow and broader U.S. stock market plunged on Thursday after a Bloomberg report cast a dark shadow over China trade negotiations.
Citing sources familiar with the matter, Bloomberg reported that Chinese officials were having serious doubts about their trade-deal progress with the Trump administration. The primary issue appears to be President Trump’s ‘impulsive nature’ and the possibility of him reneging a trade deal at any moment.
President Trump and Chinese counterpart Xi Jinping were scheduled to meet on the sidelines of the APEC summit in Chile next month to hammer out the final details of a partial trade agreement. That summit has since been cancelled due to political unrest in the Latin American country.
The Dow Jones Industrial Average (DJIA) plunged by as much as 248 points on Thursday. The blue-chip index came within striking distance of all-time highs during the previous session.
Stocks received a strong tailwind from the Federal Reserve late Wednesday as officials voted to lower interest rates for the third time this year. Despite the strong initial reaction, concerns that the Fed may be running out of stimulus weighed on investors’ sentiment in the early part of Thursday trading.
The U.S. central bank also tempered expectations about future rate cuts, pointing to a higher bar for future adjustments.
This article was edited by Josiah Wilmoth.
Last modified: October 31, 2019 11:04 PM UTC