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Trade Rhetoric Likely To Push Prices Higher

Kitco News

(Kitco News) - Participants in the Kitco News weekly gold survey look for the price of the metal to rise next week amid ongoing rhetoric pointing to a potential trade war between the U.S. and China and after a soft U.S. jobs report.

Kitco Gold Survey

Wall Street



Main Street


The metal has chopped up and down lately on headlines about the U.S. and China slapping higher tariffs on one another’s goods. As the week wound down, U.S. President Donald Trump threatened tariffs on another $100 billion of Chinese goods, while China warned it would respond with a “fierce counter strike.”

Additionally, the Labor Department reported Friday that U.S. nonfarm payrolls rose a smaller-than-forecast 103,000 in March. Expectations had been for closer to 200,000 new jobs.

As of 11 a.m. EDT, Comex June gold was up 0.6% for the week so far to $1,335.70 an ounce.

Fourteen market professionals took part in the weekly survey. Eight respondents, or 57%, called for gold prices to rise over the next week. Another two voters, or 14%, looked for gold to fall, while four, or 29%, see a sideways market.

Meanwhile, 663 voters responded in an online Main Street survey. A total of 312 respondents, or 47%, predicted that gold prices would be higher in a week. Another 261 voters, or 39%, said gold will fall, while 90, or 14%, see a sideways market.

“The disappointing jobs number is going to slow down the rally in the dollar that we saw in recent weeks,” said Phil Flynn, senior market analyst with at Price Futures Group. “Because of that, gold is going to benefit.”

Flynn also cited geopolitical worries, with Russia and Western nations slapping sanctions on one another. He added: “Sometimes when the world goes crazy, gold is the best place to be.”

Others cited ongoing worries about a trade war between the U.S. and China. When market jitters increase, equities lately have tended to fall while gold rises, and vice-versa.

“With Trump talking more pain, why would you want to be short [bearish]?” said Sean Lusk, director of commercial hedging Walsh Trading. “Because of weakness in the stock market, this is a buy down here [in gold].”

George Gero, managing director with RBC Wealth Management, also said he sees gold “higher next week as tariff news and geopolitics continue.”

Daniel Pavilonis, senior commodities brokers with RJO Futures, is also bullish.

“We’re essentially making higher lows,” Pavilonis said. “I still think we have a really good chance to be over $1,400 by the end of the year.”

Others, meanwhile, suggest gold could dip on ideas that there eventually will be some resolution to the trade war.

“The temperature on the trade war is slowly falling,” said Adam Button, ForexLive managing director, who sees lower prices over the next week.

Charlie Nedoss, senior market strategist with LaSalle Futures Group, also sees gold falling, citing technical weakness. “The dollar is performing well,” he added.

Kevin Grady, president of Phoenix Futures and Options LLC, describes himself as neutral on gold prices in the short term due to the volatility with news-driven headlines about trade tensions. Gold lately seems to rise one day about fears about a trade war, then give up gains when tensions seem to abate, then repeat the process over again.

“I see price swings up and price swings down in gold next week,” Grady said. “The market is so news-driven because of all the tariff talk….I see no difference between rolling the dice and trading this market right now.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.