Gold Falls as China Mulls Exempting Tariffs on Some US Imports

SEATTLE (Scrap Monster): Gold prices fell more than 1% on Friday as China considered exempting certain U.S. imports from its tariffs, denting the precious metal's safe-haven appeal.

Spot gold fell 1.4% to $3,302.81 an ounce as of 0636 GMT. U.S. gold futures shed 1.1% to $3,312.80.

China may exempt some U.S. imports from its 125% tariffs and is asking businesses to identify goods that could be eligible in the biggest sign yet that Beijing is anxious about the trade war's economic fallout.

Meanwhile, U.S. President Donald Trump asserted that trade talks with China are underway, pushing back against Chinese claims that no discussions have taken place to ease the ongoing trade war.

"The partial rollback of tariffs on some imports from China may be perceived as a positive step towards further de-escalation in U.S.-China trade tensions, which exert modest downward pressure on safe-haven assets like gold," said IG market strategist Yeap Jun Rong.

A spokesperson for China's commerce ministry said that if the U.S. "truly" wants to resolve the dispute, it should lift all unilateral tariff measures against China.

Non-yielding bullion, often viewed as a safeguard against global instability, has surged nearly $700 this year, scaling multiple record peaks. It reached $3,500.05 on Tuesday.

The dollar index rose 0.3%, reversing losses from the prior day. A higher dollar makes gold more expensive for overseas buyers.

"Over the longer term, structural tailwind remains intact, with further room for reserve diversification among emerging markets as they gradually align with the reserve composition of advanced economies," Rong said.

Federal Reserve officials indicated they saw no urgency in revising the monetary policy as they sought more information to determine how the Trump administration's tariffs were affecting the economy.

Spot silver fell 0.6% to $33.37 an ounce, platinum dropped 0.9% at $961.85 and palladium fell 1.7% to $937.93.

Courtesy: www.reuters.com