Gold Scores Fractional Gain, But Closes Well Off of Last Night’s High

Gold futures closed fractionally higher today, with the most active December contract currently up $0.70 and fixed at $1538.20 per ounce. Last night as gold traded overseas to a high of $1565 per ounce. This is the highest trading price gold has had not only this year but in the last six years.

On Friday, August 23 gold futures soared almost $30 on the day. They opened higher in Australia and throughout the trading day as gold futures moved from Australia to Hong Kong and then to London prices firmed dramatically. These recent gains were a result of the announcement by the Chinese on Friday that they would implement tariffs on approximately $75 billion worth of U.S. imports into their country.

According to MarketWatch, this announcement was followed by a series of tweets by President Trump in which he expressed his anger ordering U.S. companies to look for on alternative to China. This was followed by an announcement by President Trump that the U.S. would further raise tariffs on imports from China.

“Gold rose Friday after China announced it was imposing retaliatory tariffs on $75 billion in U.S. imports, drawing an angry response from President Donald Trump, who said he was ordering U.S. companies to look for alternative to China. After markets closed Friday, Trump announced the U.S. would further raise tariffs on imports from China.”

Gold began to trade off of the highs achieved yesterday as a result of statements by President Trump predicting a trade deal with China. As reported by Reuters, “U.S. President Donald Trump on Monday predicted a trade deal with China after positive gestures by Beijing, calming global markets that have been roiled by new tariffs from the world’s two largest economies.”

Reuters also reported that Chinese Vice Premier Liu He, said on Monday that China was willing to resolve the trade dispute through “calm” negotiations and opposed any increase in trade tensions.

These statements resulted in U.S. equities trading higher on the day. The Dow Jones gained 269.93 points in trading today, a 1.05% gain. The NASDAQ composite gained 1.3% and the Standard & Poor’s 500 gained 1.1% on the day.

While it is unclear when the two superpowers will come to some sort of agreement and resolution ending the trade war there is one thing that is almost a certainty; Wild price swings based on statements from both the United States and China will continue.

Wishing you as always, good trading,