LONDON: Gold fell, retreating from a two-week high hit earlier in the session, after the United States started issuing licenses for some companies to supply goods to Chinese firm Huawei, rekindling hopes for trade negotiations that had shown signs of turning more contentious.
Spot gold dipped 0.15% to $1,469.87 per ounce, having touched a two-week high of $1,478.80 earlier. U.S. gold futures settled at $1,474.2.
The U.S. Commerce Department confirmed it has begun issuing licenses for some U.S companies to supply non-sensitive goods to Huawei.
“The announcement seems to be the proximate trigger for gold’s stumble,” said Tai Wong, head of base and precious metals derivatives trading at BMO. “Gold price action lately has been nearly formulaic: the market starts to lean one way, gets disappointed in the price action, and a contrary headline gives it a shove in the opposite direction.”
The mood in markets had been sour after the U.S. Senate angered China by passing a bill requiring annual certification of Hong Kong’s autonomy and warning Beijing against violently suppressing protesters. China demanded the United States stop interfering in its internal affairs and said it would retaliate.
U.S. President Donald Trump also threatened to raise tariffs on Chinese goods if a trade deal is not reached soon.