Gold prices narrowed losses on Friday as U.S. tariffs on Chinese imports weighed on the greenback, stoking fears of a full-blown trade war between the two leading economies. China has implemented additional tariffs on some import products from the United States immediately after U.S. tariffs on $34 billion in Chinese imports took effect, state media reported. U.S. President Donald Trump has threatened more tariffs on Chinese imports for any retaliatory actions taken by China. Trade war has exited as a concept for some time but now it has become a reality. However Gold continues to remain stable with spot gold (XAUUSD) trading around $1254.45 and U.S. gold futures for August delivery slipped 0.1% to $1,257.50 an ounce.
Gold Lacking Momentum
The dollar eased against its peers on Friday ahead of the key U.S. jobs report later in the day and investor caution prevailed in global markets with focus turning to further retaliatory measures China could employ.
Silver mirrored gold’s momentum with no major change in value despite a weakening dollar. Spot silver (XAGUSD) is trading around $16.02 and is expected to continue above $16 price band as trading session closes for the day. Precious metals have so far taken serious hit with solid performance of US Greenback attracting lot of investors. However a negative outlook forecast resulting from trade war woes that could affect American economy greatly is expected to help precious metals gain momentum as trading session moves further this month.
Crude Oil market is already under dovish movement over influence from Iran’s threat to close of a major logistics route.
With Sino-U.S trade war tensions reaching new high over implementation of tariffs on Chinese imports which became active since early Friday morning, tension among investors and allied countries have reached new peak over possible direction in which China could retaliate and Trump has threatened that any retaliation by China will incur further tariff imposed on Chinese trade and business activities in U.S.A. As of 0649 GMT, U.S. West Texas Intermediate (WTI) crude futures were up 0.2 %, from their last settlement at $73.10 per barrel, while Brent crude futures were down 0.1 %, at $77.32 per barrel respectively.