Gold prices traded higher on Wednesday in Asia and hit an eight-month high ahead of highly-anticipated trade talks between Chinese and U.S. officials later in the day.
Gold futures were up $4.40, or 0.3%, at $1,313.30 on the New York Mercantile Exchange’s Comex division by 1:30 AM ET (06:30 GMT), the highest level since May 14.
Trade discussions between the U.S. and China are likely to be the major directional driver later this week. China‘s Vice Premier Liu He is set to begin trade talks with U.S. officials, including President Donald Trump, in Washington today.
The two sides are hoping to find a solution to the ongoing trade war before a March 1 deadline, but the prospect of a trade deal was dented yesterday following the U.S.’s criminal charges against China’s Huawei Technologies for violating sanctions against Iran and allegedly stealing robotic technology from U.S. carrier T-Mobile.
The charges against the Chinese technological giant boosted the safe-haven bids for gold, even after U.S. Treasury Secretary Steve Mnuchin insisted that he expects significant progress from the U.S.-China meeting and that the case against Huawei is a separate issue.
Meanwhile, investors also await more clues about the outlook for U.S. monetary policy, as the Federal Reserve’s interest rate decision is due later in the day. The central bank is expected to keep interest rates target unchanged at 2.25% to 2.5% after four hikes last year.
Fed Chairman Jerome Powell might also reiterate in his Wednesday news conference his promise to be “patient” with future monetary tightening./investing.com