GOLD BULLION slipped against a weakening Dollar in London trade Wednesday, retreating $10 from a 1-week high at $1340 per ounce as talk of a global 'trade war' spurred by US President Donald Trump grew yet again following the resignation of his top economic advisor, Gary Cohn.
After new data showed US factory orders falling steeper than expected in January, private-sector payrolls provider ADP today said the world's largest economy added more jobs than analysts forecast in February, with January's figure also revised higher.
Major government bond prices rose, nudging interest rates lower, as European equities held flat and Asian stock markets closed the day around 1% down.
"Trump will likely feel liberated by [ex-Goldman Sachs banker Cohn's exit]...It will only reinforce his own protectionist convictions."
"In Asia today gold opened $4 higher as USD/JPY plunged below ¥106," says a trading note from Swiss refiners and finance group MKS Pamp, pointing the Dollar's sharp overnight fall versus the Yen.
Bank of Japan chief Haruhiko Kuroda last week hinted that Tokyo may be
preparing to cut its massive QE stimulus program, "but the central bank has every interest in seeking a weak Yen," says a
column at Bloomberg today, noting that "Japanese corporate earnings are highly cyclical [and] a strengthening Yen can cause stocks to plunge, depressing consumption and tipping the economy back into deflation."
"The [gold bullion] market tested the $1340 level a couple of times during the [Asian] morning,"
MKS goes on, "but drifted lower on Chinese selling.
"We would expect to see buying interest...at $1320-25."
China's national gold bullion reserves were today reported as unchanged by weight for last month, down 2.0% by value in line with global Dollar prices.
China's total central-bank reserves of foreign currency fell to $3.134 trillion, down $27bn in for the first drop in 13 months as the Dollar strengthened in February.
Trade data from China – the world's No.2 exporter of goods behind Germany – are due tomorrow.
"The Trump administration is playing hardball with Beijing," says the
South China Morning Post, reporting that the number of officials on last month's trade delegation to Washington was
just a quarter of what China planned following objections from the White House.
"China is learning the hard way that this administration
may not be the pushover that Chinese officials had come to believe it was," Bloomberg quotes former IMF China specialist Eswar Prasad.
"They may be forced to offer substantive concessions in order to keep the bilateral economic relationship on an even keel."
France's exports fell hard in January new data said Wednesday, widening the No.2 Eurozone economy's trade deficit.
