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Gold Prices Dip but Holding Gains After Trump Sparks Risk-Off Move

Investing.com -- Gold futures were consolidating gains in early trading in New York Wednesday, supported by a fresh surge in risk-aversion after a combative speech at the UN General Assembly by President Donald Trump.

Trump’s speech had lambasted China, damping optimism for any near-term rapprochement between the two countries when talks between top trade negotiators resume in two weeks’ time. Trump had also rounded on Iran, reviving fears of a military escalation in the Persian Gulf.

By 9:45 AM ET, Gold futures for delivery on the Comex exchange were at $1,536.75 a troy ounce. That’s down some 0.2% from late Tuesday levels but still around 2% higher than the range it was trading in last week.

Spot gold was down 0.2% at $1,529.33 an ounce.

Other haven assets were also well bid, with the 30-year Treasury yield having fallen below 2.10% for the first time in two weeks on Tuesday and staying there early Wednesday.

Gold came under a little pressure, while bond yields ticked upward, after Chicago Federal Reserve President Charles Evans reiterated that the Fed’s recent interest rate cuts should be seen as a mid-cycle adjustment rather than the start of a new monetary policy easing cycle.

Haven assets remained well bid in Europe, where the return of the U.K. parliament triggered heated exchanges about the need for a general election to break the deadlock over Brexit. Recent defeats in court and in parliament for Prime Minister Boris Johnson have reduced the risk of a disorderly Brexit on Oct. 31, a key risk event that has supported haven appetite in recent weeks. However, opinion polls suggest a general election – which most analysts expect before year-end, could still return a government more than willing to take the U.K. out of the EU without a transitional deal.

Elsewhere, silver futures fell 0.5% to $18.54 an ounce, while platinum futures fell 1.5% to 941.40 an ounce.

Copper prices, a proxy for industrial demand which generally present a mirror image of haven assets, fell 0.4% to $2.59 a pound.

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