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The trade war has become an unexpected reality, but gold and its advantage as a safe haven have dramatically failed to profit from this war. Experts recommend that gold lovers watch the dollar and US bonds for the future.
French Finance Minister Bruno Lemerre said that the United States should expect a strong and unified response from Europe. "If there is an increase in tariffs on the automotive industry, for example, our response will be uniform and strong, showing that Europe is a unified and sovereign force."
He said the question was no longer whether there would be a commercial war or not, already started. Indeed, the US-China trade war has become a reality, after several rounds of failed talks.
This war has revealed the failure of the yellow metal to take advantage of rising global tensions for gains that many are hoping to be significant, but this has not occurred. [19659003] US President Trump's initial tariff hike on China was in effect at the end of last week. In addition, Trump threatened to impose an additional duty on Chinese goods worth $ 500 billion if China reacted.
For its part, China is committed to responding quickly and in the same way. Thus, it is clear that the United States and China are in a long and brutal trade war. However, there is no sign of sufficient market tension to revive the demand for gold.
Gold was unable to capture the right envelope and benefit from its traditional safe-haven role, but only reduced losses. Currently, he is trading around $ 1259.
The weak reaction of gold to the US-China trade war makes it more vulnerable to the effects of US and US Treasury bond yields. Experts predict that the yellow metal will be hit by further sales and falling prices.
On the other hand, the Federal Reserve said that the escalation of trade disputes between the United States and its major trading partners China, the EU, Canada and Mexico could result a slowdown in economic growth. Thus, the rise in interest rates has been slow. If the trade dispute between the US and China intensifies and the employment report is weaker than expected, investors will be able to buy safe treasury bills. This would lead to higher prices and therefore lower incomes.
If yields fall on US bonds, the dollar will become a less attractive investment. If this happens, the foreign demand for gold denominated in dollars will increase, which will further increase gold prices.
Investors are advised not to worry too much about headlines and to monitor US yields. (19659003) US stocks opened higher yesterday to recover for a third day in a row after strong data on US jobs last week, which helped investors avoid trade concerns. The Dow Jones Industrial Average <.DJI> increased by 62.72 points, or 0.26%, to 2 519.20. The Standard & Poor 's 500 Index <.SPX> rose 8.69 points, or 0.31%, to 2,768.51. The Nasdaq composite index rose 43.36 points, or 0.56%, to 7,731.75 points.
European markets continued their ascent, despite the worsening trade dispute between China and the United States and the new crisis of the British government. The European index Stoxx 600 rose by 0.5% and the British Financial Times 100 by 0.4%. The British financial markets were hit yesterday by the resignation of Foreign Minister Boris Johnson, while British stocks rose as the British pound fell.
The Nikkei average has reached a high of one week. Shares of technology and banking companies advanced, with growth of 4.2% for TDK, 2.5% for Advantest and 1.6% for Mitsubishi UFJ Financial Group.
Beirut Stock Exchange
An exchange of 10 shares ended with the closing of the Solidere course. The stock price of A fell by 1.37% to close at $ 7.15, and the price of B stock dropped by 2.75% to settle to 7, $ 07. Bank Audi shares also fell 1.10% to close at $ 93.95, and Byblos Bank shares rose 5.40% to close at $ 1.40.
The shares of Bank Audi rose 4.75% to close at $ 97.95. The total value of shares traded on the Beirut Stock Exchange was 45,159 shares valued at $ 533,458, the market value of the shares fell by 0.61% to close at $ 10.314 million.
Oil
Oil prices increased. At the end of last week, US crude stocks dropped to their lowest in over three years. Brent crude, up 49 cents, or 0.6% to $ 77.60 a barrel, rose 34 cents (+ 0.5%) to $ 74.14 a barrel, according to official data from Cushing (Oklahoma). Last month, the Organization of the Petroleum Exporting Countries (OPEC) and some outside producers agreed on a limited increase in production, last month being the public holiday of 4th July. Oil prices have recently peaked
The increase in supply will offset the impact of some production cuts implemented by OPEC and other major beginning of 2017, ending years of overheating.
Gold
Gold Prices Reach Two Weeks Yesterday, investors hedged their positions and the dollar fell to its lowest level since mid-June, while metal also supports tensions persistent commercial relations between the United States and China.
Gold rose 0.5% to $ 1260.41 an ounce To reach its highest level since June 26 in 1262.06 countries
The futures on the l '. US gold for August delivery rose 0.5% to $ 1261.70 ounce
The dollar index, which measures the strength of the greenback versus a basket of six major currencies, dropped. 19659003] Silver rose 0.7% in cash trading to $ 16.11 an ounce, and palladium rose 0.6% to $ 958.22 an ounce . Both metals reached their highest level since June 27 during the session. Platinum rose 1.7 percent to $ 854.70 an ounce, having earlier touched its highest level since June 28 at $ 855.10 an ounce
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