Trump Tariff Threats
Gold prices have surged higher again on Monday with the futures market trading up to fresh record highs. Markets were plunged into fresh uncertainty over the weekend after Trump threatened to hit China with 100% tariffs amidst frustration over failure to agree proper trade terms. The prospect of a return to all-out trade war between the two economic superpowers is a grim one for markets with risk sentiment having suffered greatly earlier in the year when tariffs came into effect. Following the threat on Friday, Trump posted on social media over the weekend telling people not to “worry about China” and that “it will all be fine”.
US Govt Shutdown Rolls On
These remarks suggest that Trump is likely employing his well-known tactic of a hard threat followed by a walk-back, still gold prices are surging all the same showing that safe haven demand is strengthening here. The US government shutdown is continuing into its third week and with no end is sight, traders are increasingly sensing this could become the longest shutdown in US history (over 35 days). With downside impact on the economy growing, gold prices should continue to draw demand as traders eye a heavier need for the Fed to press ahead with furtehr easing.
Fed Speakers on Watch
In light of the shutdown, most US data will be postponed again this week leaving focus on a raft of Fed speakers, including Powell who speaks on Tuesday. With comments likely to lean on the dovish side, gold should stay supported. Ahead of that, Trump joins world leaders in Egypt today for Gaza ceasefire discussions which could also produce market moving headlines.
Technical Views
Gold
The retest of the broken 1.61% Fib level has seen fresh demand taking the market higher again. While above this level, and with momentum studies bullish, focus is now on a test of the 2% Fib level next around the 4,179.36 mark.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.