The dollar was slightly lower in Asian trading on Tuesday, trading near 93.20, while gold prices maintained gains. The us and China trade representatives resumed trade talks by telephone on Monday evening local time in Asia. The news did not dampen gold prices. With tensions between the US and China still high, particularly with Mr Trump repeatedly criticising China on Monday, risk aversion and a weaker dollar, spot gold has climbed to around $1,935 an ounce.
China and the United States resume trade talks
In the latest update from China’s Ministry of Commerce on Tuesday morning, Liu he spoke with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. Earlier, Reuters confirmed that U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin met with Chinese Vice Premier Liu He late Monday.
In a statement, uSTR said both sides had seen progress on trade issues and were committed to making the first phase of the agreement reached in January a success.
Following is the full text of the USTR statement:
Ambassador Lighthizer and Mnuchin held a regular conference call tonight with Chinese Vice Premier Liu He to discuss the implementation of the historic FIRST phase agreement between the United States and China. The two sides discussed steps China is taking to implement the structural reforms called for in the agreement, which will ensure greater protection of intellectual property rights, remove barriers to U.S. companies in financial services and agriculture, and eliminate forced technology transfers. The two sides also discussed a significant increase in China’s purchases of U.S. products and the actions needed to implement the agreement in the future. Both sides see progress and are committed to taking the necessary steps to ensure the success of the agreement.
On the morning of August 25, Liu He, member of the Political Bureau of the Communist Party of China (CPC) Central Committee, Vice Premier of the State Council and Chinese leader of the China-Us Comprehensive Economic Dialogue, spoke by telephone with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin at request, according to the website of China’s Ministry of Commerce. The two sides held constructive dialogue on strengthening macroeconomic policy coordination and implementing the first phase of the economic and trade agreement between the two countries. The two sides agreed to create conditions and atmosphere to continue to push forward the implementation of the first phase of the China-Us economic and trade agreement.
A video conference scheduled for August 15 was postponed, with US President Donald Trump saying it was his decision. Mr Trump said last Tuesday that he had “postponed” talks with China because “I don’t want to deal with them right now”. When asked whether the United States would withdraw from the first phase of the agreement, Mr. Trump did not respond, saying, “We’ll see. We’ll see what happens.”
Larry Kudlow, the White House’s chief economic adviser, said Thursday local time that the Trump administration was still in contact with China on the first phase of the trade deal and was pleased with the progress it had made so far, particularly Beijing’s purchases of U.S. commodities.
Affected by the coVID-19 outbreak, China has fallen far short of the amount of us products it agreed to buy, but has recently stepped up its purchases of US agricultural products. China has committed to buy $36.5 billion worth of U.S. agricultural products under the first phase of the trade agreement, but after more than half of this year, it is still far behind. U.S. agricultural exports to China were just $7.274 billion in the first half of this year, according to the U.S. Census Bureau.
Donald Trump has again lashed out at China, saying it will “own” the US if Joe Biden wins
US President Donald Trump warned his supporters at the Republican National Convention on Monday that Beijing would “own” the US if a Democratic government took power. Mr Trump’s comments set the stage for a week of attacks on China by Republican speakers.
The Republican National Convention kicks off on August 24. The Republican National Convention Wednesday afternoon formally nominated President Donald Trump as the Party’s 2020 presidential nominee, pitting him against Democratic presidential nominee Joe Biden.
In his speech, Mr Trump said the US had “built China” and he criticised China’s accession to the World Trade Organisation. In addition, Trump repeated an earlier claim that his Democratic challenger, Joe Biden, was “in Beijing’s pocket” because of his son’s previous business dealings in China. “If this guy gets elected, China will own our country,” Trump said. We can’t let that happen.”
In the largely unscripted 50-minute speech, Mr. Trump called the postal vote the “biggest scam” in the history of world politics; ‘Democrats want a country without religion, without oil, without guns,’ Mr. Trump said. Mr. Trump repeated a conspiracy theory that the Obama administration spied on his 2016 campaign; He also suggested that the Democratic governor had imposed a coronavirus lockdown to hurt him politically.
Mr Trump has claimed that his administration’s response to coVID-19 has been “very good” and that the US economy appears to be showing a “super-V-shaped” recovery.
Trump praised his administration’s response to novel Coronavirus, while blaming China. “We are beating back something terrible from China, and I want them to know that we will never forget it,” Mr Trump said.
Like the Previous Democratic convention, the Republican national Convention will feature speeches every night by key party figures campaigning for Mr Trump. Pence will deliver his acceptance speech in Baltimore, Maryland, on April 26, while Trump will deliver his acceptance speech on the South Lawn of the White House on April 27.
In June, U.S. Treasury Secretary Steven Mnuchin said that if U.S. companies were not allowed to compete fairly and equally in the Chinese market, it would lead to decoupling of the U.S. and Chinese economies.
US President Donald Trump’s campaign released a summary of his second term agenda on Monday via its official website, donaldjtrump.com. According to trump campaign profile on the website of the government’s agenda, the “core priorities” will be divided into 10 topics, respectively is: employment, the eradication of the new champions, end our dependence on China, medical care, education, draining the swamp (drain the tapping swamp: one of trump political slogans, refers to his plans to solve the problem of the federal government), defend the police, to end illegal immigrants to protect American workers, and innovation for the future, the United States foreign policy priority.
It is worth noting that the Trump campaign has classified “Ending Dependence on China” as a separate chapter in its agenda summary, ranking it third among the top 10 priority areas of governance, just behind the two chapters on jobs and dealing with the epidemic. The contents of this chapter include: To withdraw a million manufacturing jobs from China, to provide tax breaks for American companies involved, to allow a 100 percent fee deduction for bringing manufacturing back to the United States in key industries like pharmaceuticals and robotics, and to deny federal contracts to companies that outsource jobs to China. And to ask China to be Fully responsible for Allowing the novel Coronavirus (SARS-coV-2) to Spread around the World.
At a regular press conference of the Foreign Ministry on August 24, a journalist asked a question about US President Donald Trump’s remark in an interview that China and the US can decouple. Chinese Foreign Ministry spokesman Zhao Lijian said China’s policy stance on developing China-Us relations has been consistent and maintained a high degree of stability and continuity. We urge some US politicians to correct their mistakes, return to reason, view and handle China-Us relations in the right way, stop harming China’s interests and discrediting and attacking China, so as to bring China-Us relations back to the right track at an early date.
Gold is close to $1,935
Spot gold held up in intraday Asian trading on Tuesday, trading near $1,934 an ounce as the dollar weakened again and the market remained in risk aversion.
Spot gold closed Monday at $1928.36 an ounce, down 11.06 dollars, or 0.57 percent. Optimism that U.S. health regulators will approve a treatment for COVID-19 has pushed Stocks on Wall Street to record highs, which has boosted risk appetite and hurt gold prices.
“Gold is just consolidating at a time when major stock indexes are at record highs,” said Phillip Streible, chief market strategist at Blue Line Futures. It really needs a bigger catalyst, it needs additional fiscal stimulus, it needs higher inflation to really kick in.”
Investors awaited a speech by Fed Chairman Colin Powell on Thursday at the central bank’s annual symposium in Jackson Hole, Wyo., for signs of how far the Central bank will go to deal with the impact of the outbreak.
Mr Powell’s comments on Thursday could be the next major driver for gold and the dollar, with investors watching to see if he signals the Fed will bring its inflation target to an average. That would keep inflation higher than it was before the Fed raised rates, making up for decades of modest price rises.
Peter Hug, head of global trading at Kitco Metals, said: “Whenever the Fed chairman speaks, there is a significant movement. Markets are watching to see if Powell is worried and what he thinks about the economy in three months ‘time. If he shows any signs of concern, it could cause major swings. When an event like this happens, many people tend to reduce their long or short positions.”
George Gero, managing director of RBC Wealth Management, said gold’s rally will continue this week and Powell’s speech this week will be one of the most noteworthy events.
Chris Weston, director of Pepperstone Research, said the market will be watching closely any communication about the Fed’s monetary policy review. “The Fed communication panel has indicated that Powell will outline the outcome of the monetary policy review,” Weston said. So this could be a multi-asset volatility event risk.”
John Sharma, an economist at National Australia Bank, said he expected gold prices to fluctuate between $1,920 and $1,980 an ounce in the short term.
MKS PAMP Group said the near-term direction of the gold market will still depend on the dollar. Gold’s downside support is at $1,925 an ounce, followed by psychological support at $1,900 an ounce. “The key upside resistance is in the 1975 to 1980 $/ oz area.”
Standard Chartered precious metals analysts said the long-term outlook for gold remained positive with further dollar weakness, low interest rates and support from additional stimulus measures.
“Covid-19 vaccine developments and improving economic data have put a headwind on the gold market in the short term,” Standard Chartered analyst Suki Cooper said in a note. “However, low and negative interest rates, a weaker dollar, and expectations of further stimulus all weigh on the upside.”
Central Banks around the world have launched massive stimulus measures to mitigate the economic damage caused by the COVID-19 pandemic, but this has also raised the prospect of higher inflation.