Tough Week For The Yellow Metal
Gold prices are heading for a 3% weekly decline amid the easing of the trade war that has given gold a strong boost since US President-elect Donald Trump took office. China and the US have reached a deal that could be considered a “win-win solution” for both parties with the US imposing 30% tariffs on Chinese goods and China imposing 10% tariffs on US goods.
Meanwhile, economic data from the US itself showed a decline in inflation from the results shown by both CPI and PPI data. US consumer prices rose less than expected in April, indicating limited inflationary pressures that remain at risk of rising as companies try to pass on the costs of higher tariffs. The PPI itself showed that prices paid to US manufacturers fell unexpectedly in April by the largest amount in five years, largely reflecting a decline in margins, indicating that companies absorbed some of the impact of higher tariffs. In other data, unemployment claims were unchanged while retail sales rose 0.1%.
The data that has been released by the US actually shows a stabilization in the increase in the inflation rate which can continue to make the Fed to maintain its interest rates for longer and when connected with the decreasing tension of the trade war, the price of gold is expected to remain under pressure considering the same thing has been supported by the change in trend that occurred on the technical side.
Source: (mrv@Newsmaker)
