- Trump meets with key trade advisers, will announce a response to Chinese tariffs.
- Risk aversion intensifies on trade war escalation: Gold, CHF and JPY soar.
Gold continues to rise sharply amid concerns about the impact of the escalation in the US-China trade war. The demand for safe-haven assets emerged over the last hours, leading to a rally in the yellow metal.
China retaliates, Trump tweets and markets fear the worst
The value of gold rose now almost $40 from daily lows. Recently reached $1,529.60/oz, the highest intraday level since August 13, when it traded at $1,535 the highest in six years.
The bullish tone in gold and the negative momentum around the greenback remains intact, so it the metal could hit new multi-year highs soon. XAU/USD stands around $1,525; if it breaks above YTD highs, the next strong resistance is located at $1,550/55.
Market focus is now on the announcements from the White House. It has been reported that Trump is with his trade team. In a tweet, Trump said US companies were “hereby ordered” to start looking for an alternative to China. The escalation in trade tensions increased the odds of more aggressive rate cuts from the Fed and weigh on the US dollar.