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 goldâ€™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.