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U.S. tariff turmoil targets more countries, boosts gold - RBC Wealth Management

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Renewed tariff talks are boosting gold towards the upper levels of its $1,450-$1,500 trading range, says RBC Wealth Management managing director George Gero. “Gold responding positively to more tensions and … lower stocks, lower dollar index. Tariff turmoil … now includes Euro Zone countries, South American countries and China,” Gero writes. Higher closes and higher opens will help gold establish $1,500 as its new base going forward, Gero adds. “Gold still in this trading range of $1,450-$1,500, but now drawn more to the upper prices as haven seekers are buyers from more impacted countries. If we eventually close over $1,500 and see more of higher moving averages, higher closes, [and] higher opens, then $1,500 could become the new base price.”

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

 

Gold ‘to shine once again’ — TD Securities

Tuesday December 03, 2019 10:30

Gold is looking good going forward, according to TD Securities. “Precious metals are set to shine once again. Notwithstanding the reports that a trade deal may not be imminent, capital is set to flow towards the yellow metal as asymmetry in the US central bank's reaction function,” strategists at TD Securities write. What this means is that while the Federal Reserve could cut rates in 2020, it is unlikely to hike them. “[The central bank is] likely to allow inflation to creep higher, thereby suppressing real rates and maintaining the allure of gold in a portfolio,” they say. Weaker growth to start the year could prompt addition gold buying, the strategists add. “We expect interest in loss-aversion, particularly in real-terms, will grow in the new year, particularly should growth disappoint and ultimately pressure the Fed into cutting rates twice more in 2020.”

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

 

Risk selloff seems contained after fresh Trump tariff threats — FXTM

Tuesday December 03, 2019 10:30

Risk selloff appears to be contained after U.S. President Donald Trump’s fresh tariff threats, according to FXTM. “The U.S. administration has proposed tariffs on $2.4 billion worth of French goods, in response to France’s digital tax that the US government says hurts American tech companies such as Google, Facebook, and Amazon. This announcement by the office of the United States Trade Representative follows President Trump’s tweets saying that he would reinstate steel and aluminium tariffs on Brazil and Argentina due to ‘massive devaluation of their currencies’,” writes FXTM market analyst Han Tan. The reaction to Trump’s comments is mixed, Tan adds. “The hit to risk appetite appears limited, with moves in safe haven assets relatively contained. Gold pared its climb to trade around $1460 at the time of writing, USDJPY weakened by about 0.6 percent before bouncing off the 109.0 support level, while 10-year US Treasury yields are holding above the 1.80 percent mark.”

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

 

France is on the radar for more U.S. tariff threats — Bannockburn Global Forex

Tuesday December 03, 2019 10:30

France is now the subject of U.S. tariff threats as the 90-day grace period since the U.S. said France's digital tax hurts American companies ended last week, says Bannockburn Global Forex chief market strategist Marc Chandler. “The Trump Administration has threatened up to 100% tariffs on about $2.4 bln of French goods (mostly consumer goods like wine, cheese, handbags, and cosmetics). The next step is for public hearings,” Chandler writes. “The U.S. also said it will investigate if Austria, Italy, and Turkey should be subject to retaliatory action as well. Note that U.K. Prime Minister Johnson has also advocated a similar tax. A global solution seems preferable and an EU solution second best, but the failure of both left it in individual countries' hands.”

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