Forex Marketz Daily Forex News – Fully Markets Update
Gold prices jumped higher on Friday as they hit a one month high. Traders are growing more concerned over a possible global trade war and are placing money into safe haven asset classes like the bullion.
As of 4:15 pm EST, spot gold (XAU/USD) was trading up by 1.38 percent at $1,346.90 an ounce. The yellow metal has hit its highest since February 20 at $1,343.06.
U.S. gold futures, for April delivery, closed up by $22.50. This was a surge of 1.7 percent, to close at $1,349.90 per ounce.
President Donald Trump signed a memorandum on Thursday that will place tariffs on up to $60 billion of imports from China. After, Beijing to urge the United States to “pull back from the brink.”
The new tariffs have a 30 day consultation period. This gives some room for compromise. Still, traders fear a trade war between the world’s two largest economies. A trade war would be very bad for global economic growth.
Gold Reacts to an increase in Global Tensions
Global markets were rattled, even further, by Trump’s appointment of John Bolton. Bolton is the new National Security Adviser. Bolton has previously called for using military force against North Korea and Iran.
The yellow metal is a safe place to park liquid assets in times of uncertainty. The dollar denominated bullion is also helped by a weaker U.S. currency. It is also helped by lower bond yields. These make the non-yielding precious metal attractive.
The bullion had risen strongly last week after the Federal Reserve gave guidance on the pace of interest rate rises. This new guidance that was less hawkish than traders had expected.
Higher interest rates push up Treasury yields. This will strengthen the dollar. A slower pace of rate hikes is good for gold the yellow metal, as well.
