Trade War In Focus Drags Down Dollar and Boosts Gold
China has taken swift action to retaliate against President Trump's tariffs on them. The country has imposed tariffs on certain products such as coal, liquefied natural gas (LNG), crude oil, agricultural equipment and electric trucks imported from the US.
Although there has been a delay in the tariffs that will be imposed on Canada and Mexico, market players have considered this to be an uncertainty and threat to the global economy, causing them to flock to hedge assets such as gold.
On the other hand, what President Trump has done has actually dragged the dollar down by around 0.43% to below 108.00 due to the retaliatory tariffs imposed by China.
With the ongoing trade war between the US and China, it has invited the Fed's reaction to comment. Through the President of the San Francisco Fed, Mary Daly, said that the Fed's work on inflation is not over yet and currently the Central Bank is still in a strong position to wait and assess the impact of tariffs on inflation.
With the uncertainty of the Fed to cut interest rates, it can be a slight obstacle to the rate of increase in gold and provide caution to market players even though the yellow metal has currently experienced a strong increase and continues to make new records.
Source: (mrv@Newsmaker)
