Gold traded near unchanged on Thursday, consolidating after hitting the latest in a string of more-than-six year highs earlier this week.
The yellow metal has jumped around 7.7% so far in August, driven by fears surrounding an escalating U.S.-China trade war, which has seen U.S. Treasury yields fall toward or below all-time lows and maintained pressure on global yields, where a large chunk of debt carries negative interest rates.
Gold was in consolidation mode after pulling back Wednesday as global equities steadied. On Thursday, geopolitical worries were further soothed after a spokesman for China’s commerce ministry said Beijing wasn’t planning to immediately respond to the latest round of U.S. tariffs.
But those remarks aren’t likely to put trade-war worries to bed.
“While China’s signals are encouraging in that they keep negotiations on the table, they are not a game changer,” wrote analysts at XM, in a note. “We’ve seen countless rounds of talks, and really nothing to show for it. In fact, China may be even less likely to make real compromises after the latest escalation, as Beijing doesn’t want to lose face by caving to Washington’s pressure.”