Gold slips to 2-week low as trade tensions ease; US payrolls data on tap
An employee holds one kilogram gold bullion at the YLG Bullion International Co. headquarters in Bangkok, Thailand, on Dec. 22, 2023. - Photographer: Chalinee Thirasupa/Bloomberg
Gold eased to hit its lowest level in two weeks on Thursday as the dollar's strength and easing trade tensions dulled the metal's safe-haven allure, while investors awaited the U.S. non-farm payrolls report.
Spot gold was down 1.6% at $3,235.55 an ounce as of 0629 GMT, after hitting its lowest level since mid-April.
U.S. gold futures lost 2.3% to $3,243.30.
The dollar rose 0.4% against its peers, making bullion more expensive for overseas buyers.
U.S. President Donald Trump said he has "potential" trade deals with India, South Korea and Japan as he sought to convert his tariff policy into trade agreements.
"Gold retraced as trade war concerns eased, but market confidence remains shaky with investors reacting to headlines daily," said Ilya Spivak, head of global macro at Tastylive.
The non-yielding metal, considered a hedge against political and financial turmoil and tends to thrive in a low interest rate environment, scaled multiple record peaks in April due to elevated uncertainties.
"The Federal Reserve's dovish policy outlook could support gold, but it may need to unwind more of the April panic first," Spivak added.
The U.S. economy contracted for the first time in three years in the first quarter of fiscal 2025, as businesses rushed to import goods ahead of Trump's expected tariffs.
Clearer signs of a faltering economy by June will move the Fed to resume cutting rates, ultimately by a full percentage point by end-2025, traders bet on Wednesday.
The market is now waiting for the non-farm payrolls report on Friday for more cues on the Fed's policy path.
China's stock and bond markets, foreign exchange and commodity futures markets will be closed from May 1-5 for the Chinese Labour Day holiday.
Spot silver fell 1.5% to $32.10 an ounce, platinum shed 1% to $957.33 and palladium rose 0.2% to $939.74. - Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
5 hours ago
- New Straits Times
China's rare earth dominance reshapes trade war battlefield
China has signalled for more than 15 years that it was looking to wea-ponise areas of the global supply chain, a strategy modelled on longstanding American export controls Beijing views as aimed at stalling its rise. The scramble in recent weeks to secure export licences for rare earths, capped by Thursday's telephone call between US and Chinese leaders Donald Trump and Xi Jinping, shows China has devised a better, more precisely targeted weapon for trade war. Industry executives and analysts say while China is showing signs of approving more exports of the key elements, it will not dismantle its new system. Modelled on the United States' own, Beijing's export licence system gives it unprecedented insight into supplier chokepoints in areas ranging from motors for electric vehicles to flight-control systems for guided missiles. "China originally took inspiration for these export control methods from the comprehensive US sanctions regime," said Zhu Junwei, a scholar at the Grandview Institution, a Beijing-based think tank focused on international relations. "China has been trying to build its own export control systems since then, to be used as a last resort." After Thursday's call, Trump said both leaders had been "straightening out some of the points, having to do mostly with rare earth magnets and some other things". He did not say whether China committed to speeding up licences for exports of rare earth magnets, after Washington curbed exports of chip design software and jet engines to Beijing in response to its perceived slow-rolling on licences. China holds a near-monopoly on rare earth magnets, a crucial component in EV motors. In April, it added some of the most sophisticated types to an export control list in its trade war with the US, forcing all exporters to apply to Beijing for licences. That put a once-obscure department of China's commerce ministry, with a staff of about 60, in charge of a chokepoint for global manufacturing. Several European auto suppliers shut down production lines last week after running out of supplies. While China's April curbs coincided with a broader package of retaliation against Washington's tariffs, the measures apply globally. "Beijing has a degree of plausible deniability — no one can prove China is doing this on purpose," said Noah Barkin, senior adviser at Rhodium Group, a China-focused US think tank. "But the rate of approvals is a pretty clear signal that China is sending a message, exerting pressure to prevent trade negotiations with the US leading to additional technology control." Even if the pace of export approvals quickens as Trump suggested, the new system gives Beijing unprecedented glimpses of how companies in a supply chain deploy the rare earths it processes, European and US executives have warned. Other governments are denied that insight because of the complexity of supply chain operations. For example, hundreds of Japanese suppliers are believed to need China to approve export licences for rare earth magnets in coming weeks to avert production disruptions, said a person who has lobbied on their behalf with Beijing. "It's sharpening China's scal-pel," said a US-based executive at a company seeking to piece together an alternative supply chain.. As early as 1992, former Chinese leader Deng Xiaoping was quoted as saying, "The Middle East has oil, China has rare earths". Beijing's landmark 2020 Export Control Law broadened curbs to cover any items affecting national security — from critical goods and materials to technology and data. China has since built its own sanctions power while pouring the equivalent of billions of dollars into developing work-arounds in response to US policies. In 2022, the US put sweeping curbs on sales of advanced semiconductor chips and tools to China over concerns the technology could advance Beijing's military power. But the move failed to halt China's development of advanced chips and artificial intelligence, analysts have said. Beijing punched back a year later by introducing export licences for gallium and germanium, and some graphite products. Exports to the US of the two critical minerals, along with germanium, were banned last December. In February, China restricted exports of five more metals key to the defence and clean energy industries.
The Star
7 hours ago
- The Star
US cuts Chinese medicine purchases threefold in April, according to customs data
MOSCOW, June 8 (Bernama-Sputnik/RIA Novosti) -- The United States drastically cut down the purchase of Chinese medicines in April, with imports in monetary terms showing a threefold drop to US$173.6 million compared to March, RIA Novosti calculations based on US customs data revealed on Sunday. The shipments of Iodine drugs made up the largest share of supplies in April, accounting for 75 per cent of Chinese medicine exports to the US. Additionally, antibiotics (9.5 per cent) and hormonal products (4.4 per cent ) also accounted for significant volumes of shipments in money. The major sellers of drugs to the US in April were India (19 per cent of US imports), Ireland (14 per cent) and Switzerland (13 per cent). China, with a 12 per cent share, ranked 12th, along with Hungary, Denmark and Japan. China and the US are now essentially in a state of trade war, which erupted after US President Donald Trump imposed a 10 per cent tariffs on imports of all Chinese goods in February, raising it to 20 per cent in March. After several reciprocal measures, the US tariff against Chinese goods reached 145 per cent, and the rate for US suppliers to China hit 125 per cent. However, already in mid-May, China and the US mutually reduced trade tariffs to 10 per cent, from May 14 for 90 days. Consequently, China started imposing a 10 per cent tariff on US imports, while the US levied a 30 per cent tariff on Chinese products as the 20 per cent "fentanyl" tariff remained in effect. In late spring, the sides accused each other of violating preliminary agreements. - Bernama-Sputnik-RIA Novosti
The Star
10 hours ago
- The Star
Vietnam exports up as US tariff threat lingers
HANOI: Vietnam's exports rose sharply last month, official figures showed Friday (June 6), as the communist country tries to negotiate relief from swingeing tariffs threatened by US President Donald Trump. May exports stood at US$39.6 billion, according to data from the General Statistics Office, up 17 percent on the same period a year ago, while the year-to-date total reached US$180.2 billion, 14 percent higher than in 2024. Vietnam, a major centre for global brands producing shoes and clothes, says it is making progress in talks with Washington to head off Trump's threatened 46 percent levy. The Southeast Asian manufacturing hub has the third-biggest trade surplus with the United States after China and Mexico, putting it in the firing line for Trump's "Liberation Day" global tariff blitz. Vietnam's overall import-export turnover stood at $78.6 billion in May, 15.5 percent higher than the same month last year. Imports were up by 14.1 percent year on year to stand at $39 billion in May. Processed industrial goods dominated exports, while imports were led by production materials. Despite the tariff uncertainty, the United States remained Vietnam's number one export market with $57 billion in the first five months of 2025 -- up from $44 billion over the same period a year ago. Vietnamese and US trade negotiators meeting in Paris this week agreed to step up the pace of their talks. Vietnam has signed several agreements to buy hundreds of millions of dollars' worth of agricultural products and other raw materials from the United States as it seeks to rebalance their trading partnership. Trump's real estate group also broke ground last month on a $1.5-billion luxury golf resort in Vietnam, while his son Eric Trump has been scouting locations for a potential tower project in Ho Chi Minh City, the country's southern business hub. - AFP
