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Home / Business / Gold price drops and shares gain as trade talk is rising

Gold price drops and shares gain as trade talk is rising



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The price of gold has seen its sharpest fall a year as investors sold the precious metal amid signs of progress in US-China trade talks.

Gold , often seen as a safe asset in times of uncertainty, fell 2% to $ 1

,382 per ounce, the biggest drop since June 2018.

Market watchers say more optimism around a potential trade deal between the US and China led to the movement.

The news boosted riskier assets such as shares, delivery stock markets higher

In the US, the broad S&P 500 index of stocks hit a fresh record, surpassing 21 June's previous high.

The Dow Jones opened up 0.8%, the S&P 500 rose 1% to 2,971.41, and the tech-focused Nasdaq rose 1.7%.

In Europe, both the UK's FTSE 100 index and Germany's Dax index were up 1.3

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"Gold tends to do well during times of concern over growth, market volatility or when markets think the powers -that are loose control of events, "said Russ Mold, investment director at stockbroker AJ Bell.

" A trade deal would deal with all three issues and markets are happy to take the view that a deal is coming. it can still be a long time coming, if there is one at all. "

Trade row

Negotiations between China and the US have dominated market moves for months as positive statements are often followed by additional tariffs, transmission stock and currency up and down.

The latest moves follow a pledge to renew talks we were the US and China, an agreement reached at the G20 summit in Japan.

US President Donald Trump agreed to hold $ 300bn on goods and relaxed restrictions on Huawei, while China agreed to make new purchases of US farm equipment

Last year, the US spent three rounds of tariffs on more than $ 250bn worth of Chinese goods. Charged by imposing tariffs ranging from 5% to 25% on $ 110bn or US products. Again, China retaliated with a tariff of $ 60bn or US goods. "Strong run"

The price of gold is also retreating after gaining 8% in June, with prices exceeding $ 1,400 per troy ounce.

"Gold has Just had a strong run, "Nothing goes up in a straight line," said Mr Mold.

While it is now no income, like a share would be, gold's indestructible nature and its place in history as a store of value make it attractive to some investors in times of strife.

Other safe-haven assets also declined, including the Japanese yen and the Swiss franc. The dollar rose 0.4% against the yen to 108.26, and advanced 0.7% on the franc to 0.9830 francs.


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