(Kitco News) - Gold and silver prices are solidly up in early U.S. trading Monday, following the weekend agreement reached between the U.S. and China to a temporary halt their heretofore escalating trade war. Gold prices pushed to a three-week high overnight. Bullish metals traders are looking at the demand side of the equation, and a more permanent U.S.-China trade truce would likely result in increased world economic growth, meaning more demand for precious metals. February gold futures were last up $8.30 an ounce at $1,234.40. March Comex silver was up $0.278 at $14.50 an ounce.
Risk appetite is back in full force to start the trading week, following the weekend news out of the G20 meeting in Argentina that the U.S. and China have agreed on a cease-fire in their trade war. Asian and European stock markets rallied sharply, while crude oil prices were also posting good gains on hopes for better world economic growth if the two largest economies stop their trade hostilities. U.S. stock indexes are pointed toward sharply higher openings when the New York day session begins.
The U.S. dollar index is weaker as secondary world currencies were boosted Monday, including the Chinese yuan, on the U.S.-China truce. That’s a bullish outside market force for the metals markets. There are notions a U.S.-China trade agreement would lessen demand for the safe-haven greenback.
The positive outcome of the weekend U.S.-China trade meeting was not completely unexpected by the marketplace, as expectations on the results had varied widely. Still, the outcome was at the least better than many expected. The U.S. and China gave each other 90 days to make further progress on their trade tiff.
The U.S.-China trade cease-fire gave traders and investors a double-barrel shot of upbeat news, following last week’s surprisingly dovish comments coming from Federal Reserve Chairman Jay Powell.
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