US President Trump Escalates US-China Trade War; Gold Unmoved
US-China Trade War News and Talking Points
- US President Trump turning up the heat on China by announcing new trade tariffs.
- Financial markets turn risk-off.
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US-China Trade War Escalates as US President Trump Doubles Down on Tariffs
The US-China trade war is pushing a healthy risk-off move Tuesday and there more to come as US President Donald Trump announces new tariffs in the wings. The US announced yesterday that they impose a 10% tariff on an additional $200 billion of Chinese goods after Beijing retaliated against the $50 billion of tariffs they US announced last week. And ominously, the US said that it would identify another $200 billion of goods for new tariffs if China retaliates to its latest action. China’s exports to the US are worth around USD505 billion. Other options open to China if trade relations worsen would include letting the Chinese Yuan weaken and/or Beijing selling some of their vast US Treasury holdings, estimated in the region of $1.2 trillion.
Markets turned risk-off after the latest announcement with the JPY and CHF both getting bid higher. AUD, a beneficiary from Chinese trade, fell further. Gold, another traditional safe-haven, seemingly did not receive the risk-off memo and remained unmoved and still around $30 lower than last week’s high print. A break below $1.275/oz. could still open the way to a fall back to December’s low print of $1,236/oz.
Gold Daily Price Chart (November 2017 – June 19, 2018)
The latest IG Client Sentiment Indicator shows retail remain substantially long of Gold but sentiment has changed over the past week.
What’s your opinion on Gold? Share your thoughts with us using the comments section at the end of the article or you can contact the author via email at Nicholas.email@example.com or via Twitter @nickcawley1
--- Written by Nick Cawley, Analyst
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.