Gold nears six-year high on weak dollar as Asian stocks rise slightly on hopes of China-US trade talksTokyo — Asian shares edged up on Monday as investors pinned their hopes on any signs of a thaw in Sino-US trade negotiations, while oil prices firmed on heightened tensions between the US and Iran.
Wall Street shares closed slightly lower on Friday after hitting a record high thanks to signals last week from the Federal Reserve that it may cut interest rates soon to bolster the US economy from protracted trade conflicts. US vice-president Mike Pence on Friday decided to call off a planned China speech, which also increased optimism ahead of trade talks. Pence had upset China with a fierce speech in October in which he laid out a litany of complaints ranging from state surveillance to human-rights abuses.
The US commerce department said on Friday it was adding several Chinese companies and a government-owned institute involved in super computing with military applications to its national security “entity list” that bars them from buying US parts and components without government approval. Oil prices climbed as tensions remain high between Tehran and Washington following Iran’s shooting down of an unmanned US surveillance drone, with US secretary of state Mike Pompeo saying “significant” sanctions on Tehran would be announced.
The combination of heightened geopolitical worries and likely US interest rate cuts encouraged investors to seek the safety of gold.In the foreign exchange market, the euro rose to a three-month high of $1.1386/$ on Monday as bearish bets on the greenback remained solid on prospects of a near-term interest rate cut by the Federal Reserve.