US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing for the latest round of high-level trade talks …
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WASHINGTON (Reuters) – United States Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing for the …
Gold prices were trading lower in morning trade on Thursday as the dollar recouped losses after cautious comments from the US Trade Representative Robert Lighthizer dented investors' hopes for a closure to the tariff war with China.
HONG KONG: Asian markets fluctuated Thursday as optimism over China-US trade talks was tempered by Donald Trump’s top negotiator, while investors also digested weak factory data from Beijing and fresh geopolitical tensions in Kashmir.
The global rally that has characterised most of this year took a knock after US Trade Representative Robert Lighthizer told lawmakers that real progress had been made with China, but a lot of work was still needed before a pact is signed.
While his comments did not derail expectations of an agreement at some point with both sides reporting good progress and Trump delaying a deadline for a deal it did give traders pause for thought, observers said.Lighthizer said a trade deal hasnt been agreed yet, bringing some reality back to euphoric markets post-Trumps tariff extension, despite the fact Lighthizer also announced both sides had agreed on an enforcement process, said OANDA senior market analyst Jeffrey Halley.
After a negative lead from Wall Street, Asian markets swung Thursday and Tokyo went into the break 0.4 percent lower.Hong Kong was up 0.4 percent mid-morning, Shanghai gained 0.3 percent, Sydney put on 0.2 percent and Wellington was up 0.4 percent.But Singapore slipped 0.5 percent and Seoul shed 0.2 percent, while Jakarta retreated 0.5 percent and Manila lost 0.7 percent.
Also fuelling selling pressure was figures showing Chinese manufacturing activity contracted for a third straight month in February, with factories hit by the long Lunar New Year break, concerns about slowing growth and uncertainty from the trade row. Better sense-However, Zhou Hao, a senior emerging markets economist at Commerzbank AG, said the results were likely not as bad as they seemed and the outlook could be positive.
I think we still want to wait for the next months reading as this months is distorted by the holiday, he said.Also the economy could stabilise this month.
Rising input prices suggest that there is no need to worry about deflation, so the question now rests on whether the economy has enough impetus.Nervousness continues to stalk trading floors after Pakistan and India said they had shot down each others fighter jets on Wednesday, fuelling worries of a conflict between the nuclear-armed neighbours.
The developments followed the February 14 suicide bombing by militants in the disputed Kashmir region that that killed 40 Indian troops.Pakistan Prime Minister Imran Khan called for better sense to prevail.With politicians on both nuclear-armed sides making soothing comments overnight, the trick will be finding a mutually face-saving path to de-escalate the situation. Of course, this will be much easier said than done, and the potential for hostilities to ratchet higher remains very high, Halley added.
On currency markets the pound held gains after touching a near eight-month high earlier Thursday after MPs gave Prime Minister Theresa May more time to work on her EU withdrawal deal after she promised they could delay Brexit if necessary.Sterling was also given a boost after the opposition Labour Party said it would back a second referendum, having lost a vote on its own Brexit plan Wednesday.
Gold prices on Thursday held near two-week lows touched in the previous session, as the dollar recouped losses after cautious comments from U.S.1 percent to $1,318.50, as of 0340 GMT.The dollar index, which measures the greenback against a basket of currencies, bounced back from three-week lows.
U.S.Trade Representative Robert Lighthizer told a Congressional hearing it is too early to predict the outcome of ongoing trade talks with Beijing and America will need to maintain the threat of tariffs on Chinese goods for years even if the two sides strike a deal.ReutersGetty Images Trade Representative Robert Lighthizer dented investors’ hopes for a closure to the tariff war with China.
As of 0340 GMT, spot gold and the U.S.gold futures were down 0.1 percent at $1,318.50 and $1,320.10 per ounce respectively.The safe-haven metal slipped to its lowest since Feb. 15 at $1,316.43 in the previous session and dropped for the first time in five months. Lighthizer told a Congressional hearing it is too early to predict the outcome of ongoing trade talks with Beijing and the United States will need to maintain the threat of tariffs on Chinese goods for years even if the two sides strike a deal.
“There is some uncertainty about the trade deal and some of the safe-haven (demand) has gone to the U.S.
dollar. That has taken a bit of a bid from gold,” said John Sharma, economist, National Australian Bank.
The dollar index, which measures the greenback against a basket of currencies, bounced back from three-week lows.”Overall, gold is expected to go up with some corrections and prices will move around the $1,310-$1,330 levels depending on the dollar,” Sharma said, adding, “main support comes from Federal Reserve’s dovish stance and a lot of central banks are keen on accumulating gold.” The U.S.Central Bank will stop shrinking its $4 trillion balance sheet later this year, Fed Chairman Jerome Powell said on Wednesday, ending a process that investors say works at cross-purposes with the Fed’s current pause on interest-rate hikes. During his testimony to the Senate Banking Committee on Tuesday, Powell reiterated that the Fed will be patient in hiking interest rates.
“The precious metal’s recent consolidation is supported by the indecision the financial markets have in pricing in what will be the Fed’s next move,” OANDA senior market analyst Edward Moya said in a note. “Gold may struggle climbing higher until we see further deterioration in U.S. data, that would seal the market expectation for the next move to be a rate cut.
” Investors are also monitoring the tensions between India and Pakistan, with the two countries engaged in retaliatory attacks, analysts said. Meanwhile, spot palladium further backed away from its all-time peak of 1,565.09 per ounce, scaled earlier in the week, and was down 0.1 percent at $1,527.50 on Thursday. The autocatalyst surged 21 percent so far this year on widening supply tightness in the market.Spot silver dipped 0.1 percent to $15.72 per ounce, while platinum was down 0.4 percent at $861.50, off its more than three-month highs of $871.94 hit in the previous session.