By Barani Krishnan
Investing.com - President Donald Trump may have delivered the blow he promised China on new trade tariffs, but don't expect gold prices to take off like a rocket beyond $1,300 because of that.
While gold could certainly benefit if the U.S.-China trade angst leads to a further battering of equities, the yellow metal's mixed technicals and fundamentals mean that its reach as a safe-haven will be limited.
Gold futures for June delivery, traded on the Comex division of the New York Mercantile Exchange, settled at $1,287.40 per ounce, up $2.20, or 0.2% on the day.
Spot gold, reflective of trades in bullion, was up $2.09, or 0.2%, at $1,286.06 per ounce by 2:45 PM ET (18:45 GMT).
Gold rose after the U.S. raised tariffs on $200 billion in Chinese goods, bringing their duties to 25% from a current 10%, despite Trump saying China's President Xi Jinping had written him a "beautiful letter" on how the two nations could cooperate on trade. Beijing promised to retaliate, escalating a battle over China's technology ambitions.
"I do think that the longer that a trade agreement doesn't get resolved between these two countries, and things continue to heat up between Trump and China, you will see gold benefit," said Philip Streible, senior strategist for metals for RJO Futures in Chicago.
"But you also have a problem with gold in the sense that it's run into a stiff resistance," Streible said. "The 100-day moving average is $1,300 and the 200-day moving average is $1,267. So we're going to be technically range bound at those levels."
Gold also advanced on Thursday after the dollar fell. The dollar index, which measures the greenback against a basket of six currencies, was down 0.1% at 97.12.
Geopolitical tensions provided support to gold too.
The U.S. Maritime Administration said in an advisory on Friday that commercial ships including oil tankers sailing through key Middle East waterways could be targeted by Iran in one of the threats to U.S. interests posed by Tehran.
Earlier this week, the U.S. military said a number of B-52 bombers would be part of additional forces being sent to the Middle East to counter what the Trump administration calls "clear indications" of threats from Iran to U.S. forces there. The Islamic Republic has dismissed the U.S. contention of a threat as "fake intelligence".
Elsewhere in metals, palladium rose strongly to trade above gold agan after briefly losing its mantle on Thursday as the world's costliest traded metal.
Spot palladium was up $49.44, or 3.8%, at $1,348.55 an ounce. The silvery-white metal, used for purifying gasoline emissions, traded above $1,600 at one point in early March.
Trades in other Comex metals as of 2:45 PM ET (18:45 GMT):
Palladium futuresup $59.30, or 4.6%, at $1,342.30 per ounce.
Platinum futures up $14.80, or 1.7%, at $866.20 per ounce.
Silver futures up 1 cents, or 0.1%, at $14.79 per ounce.
Copper futures flat at $2.77 per pound.