Gold Falls Thru' $3200 as 'Risk-On' Nasdaq Shrugs Off New US-China Trade Tensions
Wednesday, 5/14/2025 16:22
The PRICE of GOLD fell through $3200 on Wednesday, hitting 5-week lows against the Dollar and most other major currencies as Shanghai equities rose and New York's tech-stock Nasdaq index erased the last of its previous 2025 losses despite fresh tensions and risks in US-China trade relations.
Monday's
"ceasefire" in the US-China trade war "eased uncertainty and reduced risk aversion in financial markets, so the attractiveness of gold as a safe-haven asset has declined," China's
Securities Daily today quoted Liu Xiangdong, chief analyst at investment management group Dongyuan.
But "using Huawei Ascend chips anywhere in the world violates US export controls," said the Bureau of Industry and Security late Tuesday, confirming Washington's view that the giant Chinese chipmaker is employing US-made products in its artificial intelligence technology.
Beijing meantime told the UK that London's new trade deal with the Trump administration "goes against the basic principle" that such agreements don't impact third party nations, because it requires British companies to exclude Chinese products blacklisted by Washington from their supply chains.
Huawei products are
already banned by the UK from the country's 5G telecoms network.
"We believe that the recent cooling of risk aversion is
a short-term factor that will weigh on gold," says Xia Yingying, head of precious metals and energy research at brokerage Nanhua Futures.
Gold in Shanghai today closed at its lowest Yuan price in 5 weeks at ¥758 per gram, down 8.6% from late-April's all-time high.
China's CSI300 stock index, in contrast, rose near 2-month highs.
The price of bullion in London − heart of the global precious metals market's storage and trading network − then fell to $3185, the lowest price since April 10th and 9.0% below last month's record spot-market high of $3500 per Troy ounce, while New York's most-active
Comex gold futures contract lost 1.8% to $3187.
Silver prices also eased back Wednesday in both London and New York as industrial commodities slipped, dropping to 2-session lows of $32.14 per Troy ounce.
The Nasdaq 100 index of US-listed tech stocks today edged 1.3% higher for 2025 to date, reversing all of last month's 18.6%
'Liberation Day' plunge.
After the Chinese authorities
repeatedly warned against excessive speculation and
gold trading risk in recent months, "The gold price, which has been rising since the beginning of this year, has recently come to a sudden stop," says a
Securities Journal headline.
"If Trump ultimately reaches an agreement with trade partners to significantly reduce tariffs," says analysis from ICBC, China's largest lender and a bullion clearing bank in London, "improving market sentiment could lead to a decline in gold prices."
Fiscal and monetary stimulus by Beijing is also listed by ICBC among potentially 'bearish' factors for gold.
Ahead of
Beijing's central bank cutting its key interest rates and reserve-ratio requirements last week, commercial bank lending in the world's 2nd largest economy and the world's largest goods exporter last month sank to the lowest since July last year, new data said Wednesday, missing analyst forecasts by 60%.
Mid-tier UK asset managers RBC Brewin Dolphin cut its position in gold last month as the precious metal's record highs "presented a good opportunity to take profits...reallocated to cash."
US President Donald Trump meantime continued his tour of Middle Eastern states on Wednesday, following his praise of Saudi Arabia's leadership by meeting and urging Syria's new President, Ahmed al-Sharaa, to normalize relations with Israel − now
accused of "genocide" in Gaza by the United Nations' relief agency chief and
a High Court case in London − before signing a raft of defense and investment deals with Qatar.
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