Gold increases in spite of trade conflict
The US dollar has plummeted in the light of China sparking a ‘trade war‘ with the US in response to President Trump’s new tariffs on Chinese imports.
The price of gold increased following Beijing’s retaliatory measures against American goods coming to China.
“The US’ persistence in advancing the Section 301 investigation and publishing the so-called findings to pick a trade war will undoubtedly undermine the interests of American consumers, enterprises, and the financial market directly,” the Chinese Foreign Ministry said
It’s not only the trade war the US need to be worried about, China is set to shake up the crude oil futures market as it goes head to head with the US dollar by launching the highly anticipated Petro-Yuan.
RT reports: After falling in the past three trading sessions, the yellow metal surged over $8 per troy ounce to $1,335. “The trade war is going on and it is getting worse, so that might be the reason that people are selling dollars and buying gold,” said Yuichi Ikemizu at ICBC Standard Bank in Tokyo, as quoted by Reuters.
China has introduced additional tariffs of up to 25 percent on 128 US products including frozen pork, wine and certain fruits and nuts, in response to Washington’s duties on imports of aluminum and steel.
US to China: Buy more American gas if you don’t want more tariffs https://t.co/jdqQ4cQGoe
— RT (@RT_com) March 23, 2018
The index, which compares the dollar against six other major currencies, slid 0.3 percent. Gold prices slid 1.7 percent last week in its biggest drop since early December, but the precious metal has surged 1.7 percent in January-March, a third quarterly gain in a row.
Analysts say gold may have hit rock bottom, and investors are going to be lured with the current situation in the market. “Even the most steel-nerved trader will be tempted to go in now,” Ikemizu said.
Last week, analyst Larry McDonald, publisher of the Bear Traps Report, predicted a “perfect storm” of rising gold prices is coming. The turbulence around the US political situation and a possible trade war with China can send gold prices higher, he said.