Investing.com - Gold prices headed lower on Tuesday as the dollar held its ground after the U.S. and China announced their latest round of measures in the escalating trade conflict.
At 11:14 AM ET (15:54 GMT), gold futures for December delivery on the Comex division of the New York Mercantile Exchange slipped $2.00 or 0.17%, to $1,203.80 a troy ounce.
U.S. President Donald Trump said in a statement late Monday that the U.S. is slapping 10% tariffs on $200 billion worth of Chinese goods and that the tariffs would rise to 25% in January 2019.
China was quick to respond with its own round of tariffs on $60 billion in American products, which are planned to go into effect simultaneously on Sept. 24.
Trump had previously warned that "if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports,” suggesting that tensions were on the rise.
However, some commentators suggested that investors had been prepared for the higher level of 25% that now will be put off until January, providing some months for officials to advance on negotiations.
Furthermore, China’s tariffs set for implementation next week are also lower than initially planned, implying that Beijing too will hold off until the U.S. lifts the levies in January.
Gold prices were under pressure in recent months despite intensifying trade tensions between the U.S. and its trade partners, as investors turned to the dollar for safety instead of piling into the safe haven precious medal.
At 11:16 AM ET (15:56 GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, inched up 0.01% to 94.10.
In a slow week for major U.S. economic data, investors looked ahead to the next Federal Reserve policy decision to be announced on Sept. 26.
Markets currently expect the Fed to hike rates by a quarter of a point, while fed fund futures price in an additional increase at the end of the year at more than an 80% probability.
Rising U.S. interest rates were also cited as headwind for the precious metal.
In other metals trading, silver futures lost 0.23% at $14.190 a troy ounce by 11:20 AM ET (15:20 GMT).
Palladium futures rose 2.44% to $1,000.80 an ounce, while sister metal platinum traded up 1.92% at $816.30.
In base metals, copper advanced 2.75% to $2.724 a pound.