Trump's Decision Hurts Dollar, Gains Gold
The President of the United States has set his latest decision on tariffs to be imposed on his trading partners. On Thursday (3/4) Trump said he would impose a minimum tariff of 10% on all exports to the US and impose additional duties on about 60 countries to address the trade imbalance with the US. That includes some of the country's largest trading partners, such as China which now faces tariffs well above 50% the European Union and Vietnam.
The US dollar index was immediately affected by the decision, experiencing its worst decline since last month. Trump's main goal of fixing the economy and strengthening the US currency seems to have not shown results and is likely to be considered a blunder.
On the one hand, with the global trade turmoil and retaliatory actions from countries around the world, investors and market players are worried about the health of the global economy, which ultimately makes them look for gold as a hedge. The movement of gold to $ 3100 is not strange but rather predictable due to the issue of tariffs which could eventually send gold up further to the $ 3200 area. One prediction comes from Goldman Sachs who has raised its projection that gold will touch $3300 by mid-year.
There was also a strong increase on the day of Trump's tariff decision, where this increase was not only due to the "buy on rumor" action but was also predicted to continue for some time to come, especially supported by the weakening dollar which made the price of gold cheaper for holders of other currencies.
Source : (mrv@Newsmaker)
