By Barani Krishnan
Investing.com - The Chinese bogeyman, courtesy of U.S. President Donald Trump, has given gold another shot at $1,300 and helped it recapture the precious metals crown from palladium.
Gold futures for June delivery, traded on the Comex division of the New York Mercantile Exchange, settled at $1,285.20, up $3.80, or 0.3% on the day.
June palladium on Comex, meanwhile, settled down $23.40, or 1.8%, at $1,283 per ounce. That effectively meant that palladium was no longer the world's costliest-traded metal. It had held that spot since the start of the year.
Spot gold, reflective of trades in bullion, was up $4.10, or 0.3%, at $1,284.95 per ounce by 2:45 PM ET (18:45 GMT).
Spot palladium was down $23.25, or 1.8%, at $1,298.50 an ounce, touching $1,299.90 at the session bottom, its lowest since Jan. 4.
Spot palladium traded above $1,600, or $300 more than spot gold, in early March on fears of a supply crunch in the silvery-white metal used for purifying gasoline emissions. But fears in recent weeks of a crunch in global auto demand, hastened by China's economic slowdown, wiped out palladium's gaping premium to gold.
Gold rose after Trump said on Wednesday that China “broke the deal” in trade talks with Washington and would face stiff tariffs if no agreement is reached. The president said he wants to raise to 25% tariffs on $200 billion of Chinese imports, which are now at 10%.
But Trump walked back his rhetoric some this afternoon, saying that a deal with China was still possible this week and that he had received a "beautiful" letter from China Premier Xi Jinping.
China's top trade negotiator, Vice Premier Liu He, has arrived in Washington to begin trade talks.
Gold also advanced on Thursday after the dollar fell. The dollar index, which measures the greenback against a basket of six currencies, was down 0.2% at 97.17.
Gold is in a unique position of benefiting from both good and bad news on China, unlike the dollar, which has only risen as a hedge against troubles in the trade talks.
In the past, hopes for a U.S.-China deal boosted bullion on expectations that Chinese jewelry consumption would rise. In recent days, concerns that the same negotiations may be scuttled helped boost gold as a safe haven,
Trades in other Comex metals as of 2:45 PM ET (18:45 GMT):
Platinum futures down $13.40, or 1.6%, at $851 per ounce.
Silver futures down 8 cents, or 0.5%, at $14.79 per ounce.
Copper futures flat at $2.77 per pound.