Gold gains as Trump threatens to increase tariffs on Chinese goods

Gold rose on Monday after US President Donald Trump threatened to impose tariffs on Chinese goods, indicating a dramatic deterioration in Sino-US trade talks and prompting a sharp downturn in riskier assets.

FUNDAMENTALS

Spot gold rose 0.3 per cent to $1,282.96 per ounce as of 0121 GMT.


US gold futures were up 0.2 per cent to $1,283.70 an ounce.

United States President Donald Trump dramatically increased pressure on China to reach a trade deal by announcing on Sunday he would hike tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon.

Asian equities tumbled while oil prices plunged on Monday after the sudden deterioration in Sino-US trade talks, which reversed apparent progress made in recent months.

According to a report by the Wall Street Journal, China now considers cancelling trade talks with the US this week after Trump threatened to hike tariffs.

Gold is used as a safe-haven investment in times of geopolitical or global economic turmoil.

The safe-haven yen climbed and the yuan slid on Monday after Trump's announcement, sending riskier assets into a spin and slamming stock futures.

Gold demand was robust in India and Singapore last week as a correction in prices ahead of a key gold-buying festival boosted purchases even as major centres like China and Japan were closed for most of the week due to holidays.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.63 per cent to 740.82 tonnes on Friday from 745.52 tonnes on Thursday.

The Perth Mint said its gold products sales in April fell about 39 per cent from the previous month, according to a blog post.

Breaker Resources NL on Monday announced the discovery of a new steep lode with abundant coarse visible gold below surface in the southern part of the Bombora gold deposit.

Perseus Mining Ltd on Monday approved the construction of Yaoure gold mine in Cote D'Ivoire.