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Traders Are Calling 'Fed’s Bluff' - TD Securities 

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Gold prices have the potential to go higher, as markets are repricing their Federal Reserve’s rate cut expectations in light of U.S. President Donald Trump’s 10% tariff announcement on the remaining $300 billion of Chinese imports, according to TD Securities (TDS). “Just as the market started to play a new round poker with the Fed Chair, following his unenthusiastic embrace of dovish policy into 2020, signs of an intensifying trade war forced U.S. yields and the greenback sharply lower as traders called the Fed's bluff,” TDS writes. Momentum seems to support gold prices going forward. “Expectations that rates are headed towards zero in the USA grew, with the market pricing in 50bp of rate cuts in 2019 (up from 35bp yesterday). While the move in rates appears reasonable, as Powell referenced trade uncertainty as a key driver of future rate cuts, gold could still have room to shine considering its convexity related to its zero-coupon nature and uber-long duration.”

By Anna Golubova of Kitco News; agolubova@kitco.com

 

Gold Bullish As Trump’s Tariff Comments Send ‘Investors Stampeding For Safety’: FXTM

Friday August 2, 2019 09:01

Investors are searching for safety in a risk-off environment that the U.S. President Donald Trump created on Thursday with his 10% tariff on the remaining $300 billion of Chinese imports, says FXTM senior research analyst Lukman Otunuga. “Gold glittered with extreme intensity on Thursday, jumping to a fresh two week high above $1445 as Trump’s tariff tweets sent investors stampeding for safety,” Otunuga writes. Gold is in a fundamentally bullish trend and can go even higher Friday, he adds. “The precious metal has scope to push higher this afternoon if the pending U.S. jobs report fails to meet market expectations.” Other drivers supporting the yellow metal are “slowing global growth, renewed US-China trade tensions and Brexit uncertainty.” A breakout above $1,445 an ounce could move prices towards $1,450 and $1,470, Otunuga states.  

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