Gold futures are firmer overnight and into today’s Asian trade session. Traders are looking, with some rising concerns, at the details over the phase one trade agreement signed between the United States and China.
There is some trade differences between the two countries as the United States will not immediately end some tariffs on Chinese goods.
Overnight, the spot gold futures contract added 0.7 percent to trade at 1,557.02 per ounce. This contract was last up 0.12 percent in the Asian session.
The U.S. gold futures contract, for front end delivery also firmed. This contract added 0.6 percent, overnight, to trade at $1,554 per ounce.
The palladium futures contract, overnight, surged to a new record high and the platinum futures contract reached its highest price point in almost two years.
The United States and China have signed the “Phase One” trade agreement. This deal will roll back some existing tariffs immediately, but others will stay in place for at least ten months.
The tariffs that will remain in place are the 25 percent tariffs on a $250 billion in Chinese industrial goods. These include key components used by U.S. industry to make goods.
Focus now shifts to the second part of the trade agreement. This part will most likely focus on technology and cybersecurity issues. This comes from Treasury Secretary Steven Mnuchin who said this is a key issue for both nations.
Gold Traders Delve into the Phase One Trade Agreement Details
Safe haven assets are losing some capital inflows after the United States and China signed the “Phase One” trade agreement on Wednesday.
China has agreed to purchase more agricultural and energy products from the United States as well as enforce stricter regulations on intellectual property (IP) rights.
China will also open the door for foreign entities to have ownership over Chinese business entities as well as opening their financial system to foreign investment. The United States will not go ahead with new tariffs and will start the review to roll back existing tariffs.