U.S. China Trade War & Gold

Market Gage - U.S. China Trade War

Walter Pehowich is on vacation this week. The insights are from a senior Dillon Gage analyst.

Hold on…as instabilities rock the market landscape.

July 4th may be in the rearview mirror, but the fireworks appear to just be getting started—all in the name of a looming U.S. China trade war between the economic giants. So how is this affecting precious metals?

So far, about $34 billion in tariffs have been tacked on to products both coming and going, with some analysts speculating it could reach $200 billion if automobiles are thrown into consideration. Equities markets haven’t reacted with sheer panic, but if and when they do, expect a rally in the precious metals market from the “we told you so” crowd.

Overnight, the U.S. Dollar index hit a three-week low, which has given precious a welcome boost. As of the time of this writing, gold is $1263 an oz. while silver is at $16.21.

North Korea Denuclearization?

As if we didn’t have enough problems in Asia with the opening shots of the U.S. China trade war, now comes word that the deal points on the Korean de-nuclearization summit appear to be far enough apart to steer an aircraft carrier through the gap. Let’s hope it doesn’t come to that, but many experts were perplexed when the Trump Administration declared the problem solved without offering much in the way of proof. If either side jumps up from the table and throws off the gloves, the stock markets could be in for a dive, with metals traders picking up the pieces.

The U.S. dollar will continue to play a part in gold fluctuations this week, (weaker dollar should boost gold) so pay close attention to how investors react to any escalations—be they financial or military bluster.

Have a wonderful Monday…

Disclaimer: This editorial has been prepared by Dillon Gage Metals analyst for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.