Last updated on October 20th, 2019 at 11:23 am
The prices of gold increased slightly on Tuesday, October 15, 2019, after it was reported that China needs more talks and negotiations before finally signing a trade agreement with the U.S.
U.S. gold futures and spot prices both gained by 0.1%. Gold futures settled at $1,498.49 an ounce while spot gold increased to $1,493.77 an ounce.
The U.S. has already deferred the planned tariff increase on Chinese products this week and has outlined phase one of its trade deal with China. But it was reported yesterday that the Chinese side wants to have additional talks and negotiations after their October meeting to fine-tune the first phase of the deal before it could be signed by President Xi Jinping.
According to CMC Markets analyst Margaret Yang Yan, the news was very disappointing since the markets were already enjoying a risk-on rally. She says the price of the yellow metal is having lower lows and lower highs. She believes gold is now in a consolidation stage and has a weak momentum for a price recovery.
The price gain of the precious metal today was capped by the strong performance of the Asian stock markets and the Wall Street futures market. Some investors remain optimistic that Great Britain will be able to reach a withdrawal agreement and smoothly leave the European Union (EU).
British and EU officials are scheduled to meet on Thursday and Friday. The outcome of this two-day make-or-break meeting will determine whether a Brexit deal could be reached. The BBC reported that the EU is thinking about an emergency summit in order to come up with a Brexit deal.
Meanwhile, weak manufacturing data may force the Chinese government to issue an economic stimulus. Factory gate prices in September have dropped at the fastest rate since 2016. The manufacturing sector has been significantly affected by trade pressures from the U.S. and weak demand.