Gold Prices Hold Gains as US Slaps China With Nearly $50 in Tariffs By

© Reuters. – Gold prices eased from two-week highs as the dollar turned positive after bouncing off lows but mounting fears over the prospect of a trade war stoked demand for the precious metal.

for April delivery on the Comex division of the New York Mercantile Exchange rose by $5.60, or 0.42%, to $1,327.00 a troy ounce.

Invoking Section 301 of the 1974 Trade Act, President Donald Trump on Thursday signed a memorandum announcing tariffs on about $50 billion worth of Chinese exports, citing China’s unfair seizure of US intellectual property.

That triggered safe-haven demand, helping gold prices bounce off session low of $1,324.70 amid fears the move could spark a tit-for-tat trade war with China. Chinese officials have outlined plans to target agricultural goods important to rural U.S. regions that tend to support Donald Trump, the Wall Street Journal reported.

China’s foreign ministry spokeswoman Hua Chunying, meanwhile, said China would “take all necessary actions” to defend its right.

Gold prices have remained resilient in both the run up to the Federal Reserve’s 0.25% interest rate hike on Wednesday and the post-Federal Reserve period despite the central bank hiking its 2019 and 2020 rate hike projections.

While the Federal Reserve didn’t add a fourth rate to its 2018 outlook, BNP Paribas (PA:) said that it expects a total four-rate hikes as there were only a few Fed members who apposed adding a fourth rate hike this year.

“With the median dot holding at three hikes for this year by the tiniest of margin, for us the balance of risk is clearly weighted towards the FOMC bringing forward its rate path expectations, BNP Paribas said.”

In other precious metal trade, fell 0.15% to $16.40 a troy ounce, while lost 0.76% to $950.50 an ounce.

fell 1.69% to $5.30, while fell 1.10% to $2.62.

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