New uncertainties in the trade relations of the USA with China and the EU also support the gold price. It reached a 3-week high yesterday. And it could go further up.
Gold price rises
The gold price was quoted at 1,477 US dollars (FOREX) yesterday after the close of trading in the US. This was equivalent to 1,333 euros. The price rose by 1 percent compared to the previous day and reached a 3-week high. This morning the price continued to rise. At 8:30 a.m. the gold price was traded on the spot market at 1,483 US dollars (1,339 euros) (+0.4 %). The silver ounce cost 17.24 US dollars (15.58 Euro/+0.6 %).
Once again, the trade war between the USA and China had an impact on share prices. US President Donald Trump said he was in no hurry to agree a deal with Beijing. He could even imagine postponing the deal until after the US election (in November 2020). Even if Trump tried to make it clear to reporters that it was just a game of thought and not a concrete intention, the uncertainties about relations have risen again. Especially because the US openly supports the democracy movement in Hong Kong and China has therefore announced sanctions against the United States.
USA vs. Europe
The fact that the interests between the USA and Europe are increasingly diverging is now adding to the strain on the global economic equilibrium. Trump has announced that it will impose up to 100 percent customs duties on popular French goods. With this he wants to counter the digital tax levied by France against the US Internet companies Google, Amazon, Facebook and Apple (“GAFA”). This conflict could now also lead to an escalation of the customs dispute between the USA and the EU.
The situation for the gold price has also improved somewhat from a purely technical point of view. The most traded US futures contract (February) was sold yesterday, Tuesday, at 1,484 US dollars. The gold chart thus approached the upper edge of the downward trend that had existed since the beginning of September. If the gold price regains the USD 1,500 mark at the end of the day, this could mean the end of the consolidation phase and the start of a possible new price rally.
US Labour Market Data
In the short term, analysts will once again focus on the new US labor market figures. Today at 14:15 (shortly before the opening of the US futures market) the ADP labour market report will be published, on Friday afternoon the job report of the US government for the month of November will follow. If the results turn out weaker than expected, gold could gain further momentum. The same is true for the ISM Purchasing Managers Index, which is scheduled for 4 p.m. today. In a recent tweet, US President Trump has called on the Fed to cut interest rates. The next Fed meeting is scheduled for next week. However, an interest rate cut is not expected.