WASHINGTON (Sputnik): With bilateral trade consultations reportedly looming ahead, the dollar has witnessed a bit of a decline, which in turn couldn’t help but affect the precious metal’s price.
Gold showed growth on Friday, while the dollar fell against the yen following reports that US President Donald Trump would challenge Japan next on trade issues.
Spot gold rose slightly to $1,200.88 on Friday morning, having previously hit a record nearly one-week high of $1,206.98 the day before, with gold investors eagerly pinning their hopes on steady growth.
“The stronger yen versus dollar is leading to some buying in gold… The recent low of around $1,160 in August is really the bottom in gold for now,” Yuichi Ikemizu, Tokyo branch manager of ICBC Standard Bank, told Reuters.
“The next moves will mostly depend on the employment data tonight and the September Federal Reserve meeting. But it mostly looks like gold is slowly coming up and the dollar is coming off as gold is too oversold and the dollar has been overbought.”
Gold reached a record high of $1,365.23 in April and subsequently tumbled by over 10 percent, showing growth only now.
In the meantime, the dollar fell against the yen following a CNBC report on Thursday citing Trump’s comment to a Wall Street Journal columnist that he might next embark on trade issue resolution with Japan. Japan’s major oil companies are getting ready to halt all crude oil imports from Iran next month over fears Washington will put limitations on the Asian country, which had previously managed to be excluded from the first rounds of sanctions by securing respective waivers and continued buying a limited amount of Iranian oil.
No less worrisome for Japan, which heavily relies on its exports, namely of cars, was a proposal and then public consultations over the contentious issue of US’ reciprocal tariffs on an additional $200 billion worth of Chinese goods. The tariffs, followed Beijing’s response to Washington’s first round of 25-percent duties on 818 Chinese items, are expected to take effect soon, though it is not immediately clear when.
Trump has so far challenged a number of countries like Mexico, Canada and the European bloc on trade issues, specifically, on steel and aluminum imports, most recently taking a dig at the WTO. He urged the multilateral organization to “change their ways” because it has been treating Washington “very badly” recently.