On Wednesday in Asia, gold prices plunged on global trading. It was after the U.S.’s decision to postpone the tariffs on certain Chinese goods. It has eased the tension between the two sides and dented demand for the safe-haven metal.
December delivery of gold futures traded on the Comex division of the New York Mercantile Exchange declined 0.4% to $1,507.95.
The United States Trade Representative declared overnight that certain products had been removed from the tariff list.
The list includes clothing and cellphones. It is based on “health, safety, national security, and other factors” and will not face additional tariffs of 10%.
It has also stated that other tariffs will be delayed to Dec. 15 from Sep. 1 for certain goods.
The decision led to the widespread expectation that the trade war between the two countries was recovering.
Prior to the global trading news, gold prices hit six-year highs due to Hong Kong’s political mess. The main airport was even disrupted for the second day amid ongoing protests.
Earlier this week, Carrie Lam said that further violence concerning protests could push the territory “down a path of no return”.
Overnight, U.S. President Donald Trump tweeted, indicating that the Chinese government is moving its troops to the border with Hong Kong.
Analysts have warned that the situation could worsen quickly if Beijing agrees to act with military force.
Update on Petroleum Prices
Elsewhere, petroleum prices were down on Wednesday in Asia on global trading. It is due to the rising crude inventories outweighing reports that the U.S. has deferred tariffs on certain Chinese goods.
U.S. Crude Oil WTI Futures weakened 1.3% to $56.38. International Brent Oil Futures declined 1.1% to $60.64.
The weekly data from the American Petroleum Institute indicated that U.S. crude stocks surprisingly grew by 3.7 million barrels to 443 million on the previous week.
It is in contrast with the analyst prospects of a reduction of 2.8 million barrels.
Even after the U.S. Trade Representative delayed imposing a 10% import tariff on laptops, cell phones, video game consoles, and some other products made in China, the data sent oil prices down. These were all scheduled to start next month.
Today, the news eased the trade conflict between the two sides and provided backing to the stock market global trading.
On Tuesday, results came after China’s commerce ministry said in a statement that U.S. and Chinese trade representatives talked on the phone and settled to discuss again within two weeks.
Earlier this month, U.S. President Donald Trump indicated that he would impose a 10% tariff on $300 billion of Chinese goods by Sept. 1. This comes after China did not buy more American agricultural products as promised.
OPEC also began dropping hints of new or extended cuts every time oil prices start sliding down.
In a recent survey conducted by German economic institute Ifo, the U.S.-China trade war was the reason economists had a basis for their prospects of slower global economic growth.