Gold prices held steady on Tuesday as the dollar remained little changed against a currency basket as fears over a possible trade war between the U.S. and China eased after Chinese President Xi Jinping promised to lower import tariffs.
Gold futures for June delivery on the Comex division of the New York Mercantile Exchange were trading at $1,339.50 a troy ounce by 04:53 AM ET (08:53 AM GMT).
Speaking at the Boao Forum for Asia, Xi said that China would lower import tariffs on vehicles, encourage imports and strengthen the protection of intellectual property.
Xi also said that a Cold War mentality, zero-sum thinking, and isolationism was out of place in today’s world and only peaceful development and cooperation could bring results.
The remarks helped eased investor worries over the tit-for-tat tariff dispute which investors had feared might escalate into a full blown trade war between the world’s two biggest economies.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 89.53, almost unchanged for the day.
Gold is denominated in the U.S. currency and becomes more expensive for holders of other currencies when the dollar rises.
Gold prices continued to be underpinned as geopolitical tensions helped support safe haven demand. Markets fear that U.S.-Russia relations could deteriorate amid heightened tensions in the wake of a suspected chemical weapons attack in Syria.
Investors seek out gold as a store of value during times of political or economic uncertainty.
In other precious metal trade, silver futures were down 0.21% to $16.495 a troy ounce, while platinum futures shed 0.2% to trade at $937.50.
Among base metals, copper futures were up 0.62% to $3.096 a pound.
