AGE Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.
5/6/2019: Gold gains on trade war fears
Source: Bill Musgrave, American Gold Exchange
Austin — Gold gained 0.2% to close near $1,284 as the threat of a renewed trade war with China caused investors to shed risk in favor of safe-haven assets.
President Trump threatened to raise tariffs on $200 billion in Chinese imports from 10% to 25% by next week because trade negotiations are not progressing quickly enough. He added that he would also impose tariffs on another $325 billion in goods from China.
China's officials, apparently taken by surprise, threatened to pull out of the trade talks altogether, saying they will not "negotiate with a gun to our heads."
Coming just days after VP Mike Pence suggested a deal was imminent, the tweeted threats shocked financial markets, causing the Dow to fall 0.5% and the Global Dow 0.8%. The VIX volatile index, often called the Wall Street fear index, jumped to the highest level in a year.
The dollar edged higher on flights to safety while the yuan plunged, and the safe-haven yen hit an eight-week high. US Treasury prices also surged, driving yields lower. A rising dollar tends to limit gold's gains by making it more expensive in other currencies.
The other precious metals were mixed, with platinum rising 0.7% while silver and palladium slid 0.3% and 2.2%, respectively.
At the Comex close: June gold gained $2.50 to $1,283.80; July silver slipped 5 cents to $14.93; July platinum added $6.10, to $880.90; and June palladium lost $29.90 to $1,328.10 an ounce.
AGE Gold Commentary
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