Friday, gold marked fresh 6-year high after the US-China dispute intensified and Fed Chairman Powell said the US economy faces “significant risks” from slowing global growth.
Gold climbed after China announced it will impose additional tariffs in retaliation for President Trump’s latest planned tariffs.
President Trump then said he would respond to the new China tariffs later Friday, at this writing the market is still waiting for President Trump’s response, accelerating gold’s gains and adding to concerns that demand for Copper and other industrial metals will be further hurt as the trade dispute continues
Trade-policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the US, Chairman Powell said in the text of remarks Friday in Jackson Hole, Wyoming. “We will act as appropriate to sustain the expansion,” he said. That bolstered expectations the Fed will cut interest rates further.
“That’s a very accommodating statement,” the senior market strategist at RJO Futures in Chicago, said. “They’re going to keep this thing going for as long as they can.”
Traders of fed funds futures jacked up their expectations for the amount of easing they expect from the Fed this year after Mr. Powell’s remarks. The outlook for lower rates may help revive investor demand for gold, which erased a weekly loss.
Lower rates are good for the precious Yellow metal, which does not pay interest.
Gold futures for Dec delivery rose 1.9% to settle at $1,537.60 oz at 1:32p EDT on the COMEX in New York
A gauge of gold miners climbed Friday, led by Toronto-based miners Yamana Gold Inc. and Kinross Gold Corp., while an index of global base-metals companies was trading near an 8-month low.
The headlines coming out of China and Jackson Hole today, combined with a long weekend in UK, see people taking some risks off and rolling over into gold.
Have a terrific weekend