Opinion with Peter Hug
Gold Lower As Capital Flows Into the US$ On Trade Concerns
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - The dollar continues to attract capital flows as stress continues to increase in some emerging markets. Global consequences to trade with the impending $200 billion in Chinese tariffs due to take effect this Thursday have pushed capital into the perceived safe haven of dollar-denominated assets. Gold dropped on dollar strength and both silver and the PGMs have been hit, not only by gold’s weakness, but also with the perception that slowing international trade will diminish demand for the industrial metals complex. Should the tariff deadline with China be mitigated before Thursday, we would expect a significant bounce in the latter group. Gold needs to recapture the $1,197 level to generate interest. A break below the $1,192 area suggests a retest of $1,180 is probable. Expect increased volatility as global markets are becoming increasingly risky.