Gold rallied to 1300 very suddenly Monday in response to news on two fronts. First, US-China trade war negotiations headed sharply south. Second, heightening tensions in the Middle East sprang into focus with attacks on oil shipping in the Persian Gulf. After the initial jump gold was unable to continue above 1300 but has clung to the 1300 level since then.
Trade war negotiations seemed to do a 180 over the weekend, with China announcing tariffs on $60 billion of US goods. This in response to the Trump administration’s decision not to delay tariffs on Chinese goods any longer. Both sides seem to have switched to the same “press your attack” strategy, which doesn’t usually result in a swift agreement. You can look for the trade war to continue dragging along for the near term at least.
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