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Gold heads north as evergreen buck keeps diving on Trump’s tariff initiative
On Monday, gold kept gaining momentum. It was caused by American President Donald Trump’s shocking announcement as for tariffs on imported aluminum and steel generated a sell-off in stocks and the evergreen buck.
April delivery gold futures edged up 0.32% on the Comex exchange, New York being worth $1,327.50 per troy ounce.
As a matter of fact Donald Trump’s shocking tariff policy on steel as well as aluminium made investors around the globe worry a lot. It’s because over the weekend the Trump administration stressed that there wouldn’t be any exclusions for anybody. As for the evergreen buck, the major American currency has been going down since Donald Trump uncovered his outrageous decision on tariffs on Friday.
On Monday morning the US currency started in Asia at a minimum notwithstanding its short-lived ascend the previous week when fresh Federal Reserve head Powell officially confirmed the tightening policy.
Gauging the US currency versus a group of six main rivals, the US dollar index inched down 0.02% ending up with a result of 89.93. On Monday, the evergreen buck had been trading staying below the 90 level.
A number of greenback-denominated assets, including gold have always reacted a lot to any fluctuations in the US currency. It’s because a sag in the evergreen buck makes gold more affordable for keepers of foreign currency, thus, spurring demand for the number one precious commodity.
The previous week gold pressured reacting to Fed Chair Jerome Powell’s hawkish remarks, although clawed back most of its weekly drop on Friday responding to a weaker greenback as well as lower equity prices.
As for Asian equities, on Monday they traded lower in morning trade, hovering over 2-week minimums. On Monday, China found itself in focus because today this year’s National People’s Congress burst out in Beijing.
The market is resilient ahead of the speeches of Fed’s Powell and ECB President Lagarde, but there are still interesting movements.
The uncertainty over US fiscal stimulus and Brexit, and also rising new virus cases deteriorated the market mood. That’s why we can expect the further rally of the US dollar and the fall of riskier assets today.
The market sentiment is mixed, but there are still interesting movements on the market.