Gold gains nearly 2% today, hitting new all-time highs at $3,295 per ounce. The metal is supported by very strong fundamentals, including ongoing uncertainty in global equity markets, concerns over economic growth in the U.S., Asia, and Europe, as well as the escalation of the trade war.
- In an unexpected move, the White House yesterday imposed tariffs of up to 245% on imported goods from China—specifically syringes and needles—citing excessive dependence on Chinese products. In response, Hong Kong decided to suspend the processing of postal shipments to the United States.
- The market has reason to believe that no meaningful progress has been made in recent days in U.S.–China trade talks. China’s decision yesterday to suspend Boeing aircraft orders signals that Beijing may be far from initiating any talks aimed at easing strained relations with the new U.S. administration.
- White House press secretary Karoline Leavitt stated that Trump believes the “negotiation ball” is now in China’s court, and the United States is under no obligation to reach any deal with Beijing. Speaking on Fox, Trump also declared that the U.S. can pursue a policy that “forces” countries to choose between the U.S. and China as their trade partner.
- Such a scenario appears problematic, as it seems increasingly likely that Trump’s trade war and associated tariffs will largely remain in place. This is also reflected in the stagnation of talks with other countries. Yesterday, Bloomberg reported a lack of progress in negotiations between the United States and Europe. All of this is expected to fuel major tensions in global trade and slow down economic growth.
GOLD chart (Daily Interval)
Gold is trading at record highs today, with both MACD and RSI indicators approaching overbought levels.
Volatility in gold prices may increase around 1:30 PM GMT, when U.S. retail sales data for March is released, followed by Jerome Powell’s speech at 6:30 PM GMT. It seems likely that gold will continue to perform well—especially if U.S. economic data disappoints.
Source: xStation5
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