Gold, rare earths producers buoyed by US-China trade war escalation
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The news: Gold and rare earths producers were leading gains on the ASX 200 in afternoon trade, after an escalation in trade tensions between China and the US ahead of an anticipated meeting between President Xi Jinping and Donald Trump at the end of the month.
The numbers: At 1:36pm AEDT, gold and rare earths producers made up all of the top 10 biggest gainers on the ASX 200.
Regis Resources led gains as its shares lifted 6.9% to $6.08. Other advancing gold miners were Catalyst Metals (+6.4%), Bellevue Gold (+4.5%), Greatland Resources (+4.5%), Genesis Minerals (+4.3%), Emerald Resources (+3.5%), Newmont Corporation (+3.2%) and Evolution Mining (+2.9%).
Meanwhile, rare earth producers Lynas Rare Earths (+6.7%) and Iluka Resources (+5.3%) also posted big gains.
The context: The spot price of gold – considered a hedge against economic uncertainty by investors – have surged as trade tensions escalated, setting another new record of just above USD4,060 ($6,220.3) per ounce earlier on Monday.
China’s Ministry of Commerce announced new export licence restrictions on technologies with even trace amounts of rare earths with a Chinese origin as well as extraction, refining or magnet manufacturing technologies.
In retaliation, Trump announced an additional 100% tariff rate on all Chinese exports and threatened to cancel a meeting with Xi in South Korea at the end of October.
The Commerce Ministry on Sunday said “China’s position on the trade war is consistent: we do not want it, but we are not afraid of it”.
The sources: Bloomberg, Bloomberg, The Financial Times, The Financial Times
