Gold Prices Climb to Fresh 2019 High as US and China Boost Tariffs

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The cost of gold climbs to a fresh yearly high ($ 1555) amid growing tensions between the US and China, and current market conditions are most likely to keep bullion afloat as there appears to be a flight to security.


Fed Fund futures continue to reflect frustrating expectations for a 25bp decrease on September 18, with the figures now revealing restored speculation for a 50bp rate cut as the ongoing shift in trade policy moistens the outlook for the US economy.

Keep in mind, the more comprehensive outlook for gold rates remain constructive as both cost and the Relative Strength Index (RSI) clear the bearish trends from previously this year.Moreover, gold has broken out of a near-term holding pattern following the stopped working attempt to close below the $1402 (78.6% growth) area, with the RSI still tracking the bullish development from April.More recently, gold climbs to a fresh yearly-high ($ 1555) following the stopped working efforts to close listed below the $1488 (61.8% growth), but require break/close above $1554 (100% expansion) to open up the Fibonacci overlap around $1629 (23.6% retracement) to $1634 (78.6% retracement). Will keep a close eye on the RSI as it works its method towards overbought territory, with a break above 70 most likely to be accompanied by higher gold prices as the bullish momentum gathers speed.

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Little signs of a US-China trade deal may push a growing variety of Fed officials to change their tune, and the FOMC might continue to modify the forward guidance for financial policy as “committee participants have actually generally responded to these developments and the dangers they present by shifting down their projections of the appropriate federal funds rate course.”.

In addition, the “remaining 300 billion Dollars of items and items from China, that was being taxed from September 1st at 10%, will now be taxed at 15%,” and the growing threat of trade war might end up being a growing concern for the Federal Reserve as “trade policy uncertainty seems to be contributing in the international downturn.”.

With that stated, falling US Treasury yields in addition to the inverting yield curve might press market participants to hedge against fiat currencies, and the danger of a policy error might keep gold prices afloat as there appears to be a flight to security.

In turn, the Federal Open Market Committee (FOMC) may come under increased pressure to carry out a rate reducing cycle, however it remains to be seen if the central bank will reverse the four rate walkings from 2018 as Chairman Jerome Powell argues that financial policy “can not provide a settled rulebook for global trade.”.

Source: Trading View.


Gold rates might continue to exhibit a bullish habits as China enhances tariffs on the United States, with President Donald Trump responding by revealing that “beginning on October 1st, the 250 billion Dollars of goods and items from China, currently being taxed at 25%, will be taxed at 30%.”.