Trade Wars Escalate; Gold Has No Reaction
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
On Tuesday afternoon, President Trump issued a new round of tariffs on $200 billion of Chinese goods, sending equities to a 200-point sell-off in less than five minutes. This happened at 4:55 p.m. EDT as the extended futures session was about to close.
The selling continued overnight, adding another 200 points to the downside with the VIX popping 1.00 higher. While all this action was going on, gold drifted lower and is back under $1,250.
We remain cautiously bullish from these levels but are watching the $1,240 level with great concern. If gold takes out the $1,238 low, it could go a lot lower. For now, the risk-reward favors being long gold but the question is: why is the gold trade so muted here with the global economy under stress?