Gold prices on fire thanks to US-China trade war
Renewed trade war fears are breathing life into the gold market, according to Phil Streible, senior market analyst at RJO Futures, who also pointed to growing investor fears over the possibility of a rate cut.
“Potentially down the road, if equities slow down, and if the global economy slows down enough, you might see the Fed cut rates, that’s what’s breathing life right now into that gold market,” Streible told Kitco News.
Gold prices jumped on the news of China’s tariff retaliation against the US, retaking the $1,300 key level. The yellow metal, which has been trading well below its key psychological level for the last few weeks, reacted as a safe haven asset on Monday, gaining one percent and hitting $1,303.26, which is its highest in over a month. Gold steadied on Tuesday, trading at $1297.60 an ounce as of 9:12 GMT.
Gold’s turnaround came while other metals, including silver, palladium and platinum reacted with a downward move. Global stock markets and oil have also nosedived.
Experts say gold will continue to see a safe-haven demand, with prices overdue for a rebound. According to Orchid Research, gold prices have been under pressure in April and the tide is about to turn in May due to the dovish Federal Reserve and a lower US dollar.
Chief market analyst at Insignia Consultants, Chintan Karnani, also says that “uncertainty over the real impact on [the] US economy and Chinese economy is driving gold prices higher.” He told MarketWatch that the overall trend for gold is “bullish” as long as the precious metal trades over the $1,292-$1,294 zone.
- Source : RT
