Opinion with Peter Hug
After the Numbers
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - The underlying focus for the gold market remains the worry about a potential trade war with China. It was a matter of time before President Trump’s ego forced him to respond to China’s comment on Wednesday that they had won round one of the tariff salvo. Last night, President Trump proposed another $100 billion to the list of tariff increases on the Chinese and the gold market promptly jumped higher. Traders lightened up on the position ahead of the employment data today, in case the release contained an upward revision in wage pressures. The employment data came out substantially below estimates and wage inflation remained muted. That helped the metals initially on thoughts that the Fed may decide to take a wait-and-see attitude towards higher rates but the main focus had already returned to the trade war worry and gold was rebid. For traders trying to be ahead of the sound bites, good luck. Buying support lines, with tight stops, and selling resistance has worked to some degree but when you are dealing with a market that responds to the interpretation of tweets -- good luck with setting up a strategy. We see support at the $1,322 level, with resistance evident at $1,337.