The entire narrative reigning over the market sentiments is the trade tensions between the US and China where both sides do not look to reconcile. President Trump is ready to impose another round of tariffs on $200 billion worth of Chinese goods.
Apart from these, he has even warned of further tariffs on $267 billion worth of goods. Most perceptibly, it will attract similar retaliation from China, unless both the sides agree to soften their stance.
The recent tariffs announcement implies everything imported from China would attract taxes and will quiver the economies globally.
Sentiments have taken a hit with Trump’s protectionist policies and going by the true nature of gold, it has finally started to attract safe-haven buying as US-Sino trade tensions are escalating.
Gold’s march to the tune of the dollar index has been quite pronounced in the recent times. The recent dip in the dollar index has made all the difference to gold prices, wherein they have retreated by around 4 percent from their yearly lows of close to $1,160 an ounce in international markets and Rs 29,268 per 10 grams in domestic bourses seen in mid-August.
Since gold prices were quite stretched on the downside due to the movement of the mighty dollar index amidst monetary tightening and bright outlook of the US economy, this was a necessary breather for balancing the markets.
The wide-ranging array of factors is suggesting that gold prices may witness more recovery in line with the recent upswing. If they sustain above $1,210 an ounce at COMEX, the yellow metal looks to extend the current leg of recovery towards $1,235-$1,240 an ounce.
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