(Bloomberg) – Gold climbed – climbing – getting a small position above $ 2,900 per ounce – while traders sought safety in precious metal, with the latest rate announcement of President Donald Trump that a global trade war could run the risk of bringing the US economy into a recession.
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Trump said that he increased the steel and aluminum rate on Canadian goods to 50% to take revenge on Ontario’s movement to place a levy on electricity sent to the US and set up his fight with the largest trading partner of the US. US shares pushed lower and the dollar fell and helped precious metal to 1.2% higher.
Tarif heads In the past few weeks, large fluctuations have created shares and kept investors on sharply. A whole series of lukewarm economic reports in the US have also fueled the fear of stagflation, where there is an upward risk of inflation and the downward risk of economic growth. All in all, traders were increasingly convinced that a growth delay caused by the trade will cause the Federal Reserve to lower the interest rates several times this year.
“That will be a steel wind for gold in an interview in an interview,” said Stephen Jury, global raw materialist at JPMorgan Private Bank. Increasing the possibility of a recession in the US will probably lead to an environment where the rates and the dollar can go lower according to the jury. “That will set up a very constructive scenario for a higher golden price in the second half of this year.”
Jury sees every dip in gold prices a buying option for investors to diversify a traditional mix of shares and bonds.
Former Finance Minister Lawrence Summers said on Tuesday that there is almost a 50-50 chance that the US will be tipping this year in a recession due to a series of policy steps from the Trump government that undermine confidence.
Gold is 11% advanced this year and has reached successive records. The rally is powered by fears about the disruption caused by the Trump government, buying and speculating central bank. The FED can further lower the interest rates. Lower loan costs tend to benefit non-conductive gold.
Spot Gold won 0.9% at $ 2,916.17 an ounce at 12:16 pm in New York. The Bloomberg Dollar Spot Index fell 0.3%. Silver, palladium and platinum all advanced.
-With help from Jack Ryan, Sybilla Gross and Preeti Soni.
