US-China Trade War Fuels Safe-Haven Eis
Gold jumped with 1% in the early Wednesday trade and reached a record high of $ 2,869.68 before he withdrew somewhat. US Gold Futures rose 0.7% to $ 2,895, because escalating tensions between the US and China investors drove to safe port activa.
China took revenge on newly imposed American rates with his own set of trade restrictions, which re -creates the fear of a long -term economic impasse. President Donald Trump stated that he was not in a hurry to negotiate with Chinese President Xi Jinping, indicating that tensions can continue to exist. The renewed trade war has increased concern about inflation and potential recession risks, so that gold prices are pushed higher as traders decrease against economic uncertainty.
Federal Reserve Corn and inflation problems
Three Federal Reserve officials warned this week that escalating rates can contribute to the inflatoid pressure. One policy maker suggested that uncertainty about inflation trends can justify a more measured approach to speed reductions. Traders are closely monitoring for economic data releases, including the ADP work report and upcoming salary figures, for further instructions on the FED interest path.
Gold, traditionally as an inflation, benefits from rising consumer prices. Higher interest rates can, however, limit further profits by increasing the alternative costs of keeping non-return assets such as precious metal. The market remains sensitive to all signals from the FED with regard to its position in inflation and monetary policy.
Bond market movements while traders are waiting for jobs
The 10-year-old Treasury return fell 3 basic points to 4.478%, while the return of 2 years fell to 4.193%, which was a reflection of the growing caution in bond investors. The movements of the bond market will correspond later this week with the expectations of important employment data, which will provide insight into the strength of the American labor market.
VICE chairman of the Federal Reserve Philip Jefferson stated that policy makers must carefully assess the economic conditions before the interest rates are adjusted. Although inflation gradually relaxes, the FED remains vigilant, in particular because trade tensions are introducing new economic risks.