Investing.com - The missed U.S-China summit opportunity may be good for gold. The only trouble is the dollar is rallying on that, too, as the greenback has become a hedge to trade troubles as well. That has capped gold's safe-haven potential.
Both bullion and gold futures were on the positive side of $1,300 for the first time in six sessions on Friday, reacting to news that U.S. President Donald Trump will not meet with Chinese counterpart Xi Jinping before the March 1 deadline to sign a trade deal.
The spot gold contract, reflective of trades in physical bullion, was up $4.35, or 0.3%, at $1,314.47 per ounce by 3:46 PM ET (20:46 GMT).
In futures trading, gold's benchmark April contract on the Comex division of the New York Mercantile Exchange settled up $4.30, or 0.3%, to $1,318.50 per ounce.
For the week, both the spot price and futures of gold were down 0.3%.
The lack of a meeting between Trump and Xi had dampened hopes for a smooth resolution to the U.S.-China trade war, one of the most intense rivalries of this generation. Both U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer are still expected in China next week for another round of talks to avert an increase in U.S. tariffs on Chinese goods.
"Investors are getting nervous as the market had been optimistic about a resolution of the trade dispute since the beginning of the year," said Shusuke Yamada, chief Japan FX and equity strategist at Bank Of America Merrill Lynch.
Gold futures hit highs above $1,300 for five-consecutive sessions through Jan. 31, peaking at $1,331.10, as investors raised their stakes in the yellow metal amid Fed reassurances that it will be patient with rate hikes. That rally was followed by five
The dollar also rallied Friday on the missed summit opportunity. Trade uncertainty tends to support the dollar, which is considered a safe haven in light of trade tensions.
The dollar index, which tracks the greenback against a basket of other major currencies, rose for the fifth week in a row. Prior to the renewed worries over China, the dollar had been under pressure from the Fed's patient stance.
Palladium remained the world's most valuable traded metal, with its spot price trading at $1,404.20 per ounce, up $18.10, or 1.3% on the day.
Spot palladium first traded above gold last month when it hit record highs of $1,440.35 on Jan. 17. Gold's own peaks have been higher in the past, rallying above $1,900 in 2011.
Trades in other Comex metals as of 12:14 PM ET (17:14 GMT):
Palladium futures up $19.50, or 1.4%, at $1,377.60 per ounce.
Silver futures up 10.9 cents, or 0.7%, at $15.82 per ounce.
Platinum futures up $4.60, or 0.6%, at $801.90 per ounce.
Copper futures down 1.9 cents, or 0.6%, at $2.81 per pound.