Gold tops $1,300 to highest level in about 7 weeks on fresh tariff tensions

Gold futures rose firmly on Friday as investors fled to the perceived safety of havens like precious metals amid fresh signs of escalation in tariff tensions between the U.S. and its global trade partners.

The U.S. “intending to impose trade tariff on Mexico, Germany and other eurozone nations apart from China will be bullish for gold,” said Chintan Karnani, chief market analyst at Insignia Consultants.

Also, the “investment world is filled with speculation that China is preparing to retaliate over the Huawei issue. Rare earth exports to [the U.S.] could be stopped in extreme circumstance,” he said.

Read: Is the threat of withholding rare-earth metals a key weapon in China’s trade war with U.S.?

Gold for August delivery on Comex GCM19, +1.02% rallied by $16.20, or 1.3%, to $1,308.60 an ounce, putting the metal on track for the highest finish for a most-active contract since April 10, FactSet data show. The gains put prices, based on the most-active contracts, on pace for nearly 2% weekly gain, and a 1.8% advance for the month.

July silver SIN19, +0.58% meanwhile, added 16.4 cents, or 1.1%, to $14.655 an ounce, and was on pace for a weekly rise of 0.7%, but traded down 2.2% for May.

The moves for the metals come as President Donald Trump announced in a tweet that the U.S. would impose a 5% tariff on all goods from Mexico until that country stops the flow of illegal immigrants into the country. He said the tariffs will rise to 10% on July 1 if the crisis persists, and by another 5% for every successive month, up to 25% by Oct. 1.

The announcement comes amid reports from Chinese state-owned media threatening fresh retaliatory measures in Beijing’s tariff spat with the U.S. That action comes as data from the second-largest economy

Read More Here...

Bookmark the permalink.