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China Demands Cancellation of December 15 Tariffs | Gold Prices Rise on Trade Uncertainties

Published December 11, 2019
  • According to CNBC reporter Eunice Yoon, China sees the cancellation of the scheduled December 15th tariffs as a minimum pre-condition for continuing negotiations on a trade deal with the US.  Yoon also noted that China is “extremely reluctant” to concrete figures on purchases of US farming products.  The Trump Administration has kept everyone guessing as to whether they will move forward with the next round of tariffs,  a move that would almost certainly sour negotiations and derail hopes of a Phase One deal anytime soon.  The US dollar is slightly higher in an otherwise muted FX market as markets await the decision.
  • Gold prices are inching higher this morning as markets hedge against US-China trade uncertainties.  The yellow metal has struggled to recover after last Friday’s blowout US jobs reports, and its performance over the next couple of months will largely depend on market sentiment.  There is also the seasonality factor in play, as Gold demand has typically spiked in January over the last few decades.
  • US CPI data came in slightly better than expected, but the market reaction has been muted so far.  Next up on the calendar is the Fed decision at 2 pm, followed by Fed Chair Powell’s press conference at 230 pm.  Markets will be looking for hints as to the future of US interest rates in 2020, but expectations are for Powell to keep all options on the table and hint at staying put for the time being.

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