On Tuesday, Spot gold prices ended higher by 0.33 percent whereas on the MCX Gold prices ended higher by 0.53 percent. Gold prices firmed as the U.S.-China trade tension dented the risk appetite amongst investors in turn improving the appeal for the safe haven. President Trump further added that he would target a further $325 billion of Chinese goods with 25 percent tariffs “shortly”, aiming to impose tariffs on all the products imported into the United States from China which strengthened the Dollar Index. Chinese Vice Premier Liu He will travel to Washington for the final two days of trade talks this week to try and avoid the hike in tariff rates or any additional tariffs on Chinese goods which might have severe impact on the China’s economy and global economic growth.
Outlook
We expect gold prices to trade higher as Trump threatened to hike the tariff rates from 10 percent to 25 percent on Chinese goods which might dent the risk appetite amongst investors and increase the demand for the safe haven asset, Gold. On the MCX, gold prices are expected to trade higher today, international markets are trading marginally higher by 0.16 percent at $1287.65 per ounce.
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