A period of high volatility for the gold market, which, after the decline of recent days, has returned to rise.

On Monday, April 7, the yellow metal slipped by more than 2%, as investors turned to the dollar as a safe haven asset after US tariffs intensified fears of a global recession. SPOT gold fell 2.4% to $2,963.19 per ounce, after hitting a nearly four-week low at $2,955.89. Analysts' sentiment on the precious metal has remained positive, however, given the storm winds that are sweeping stock markets. And the rise was not long in coming. 

Mercoledì 9 Aprile, dopo 14.500 miliardi di dollari spazzati via nei soli cinque giorni lavorativi dall’annuncio dei “dazi reciproci”, Trump ha fatto retromarcia, sospendendo le tariffe per 90 giorni; peraltro, senza aver ottenuto concessioni commerciali da alcun Paese. 

Wednesday 9 April, after 14,500 billion dollars swept away in just five working days since the announcement of "reciprocal duties", Trump has reversed, suspending tariffs for 90 days; however, without having obtained trade concessions from any country. 

The reasons that have led the tycoon to turn back are not only in fear of a US recession, clamorously self-inflicted by the president himself, but also in a strategy of sinking China.
While most of the duties have been suspended, in fact, those that weigh on the Chinese economy have soared to +125%. By isolating the main trade opponent, Trump hopes to occupy a strong position at the negotiating table with Beijing.
The US public debt in Chinese reserves has fallen from 1,300 billion in 2013 to 761 according to the latest estimates: the share is more than halved. The Central Bank of China is now committed to limiting the renewals of US bonds on maturity, instead encouraging traders to accumulate gold.

But the purchases of the Dragon are not the only fuel for the good refuge par excellence. 

Despite improved investor sentiment, Trump’s decision to suspend trade tariffs has injected a good deal of uncertainty into the markets.
The chart below clearly illustrates the behaviour of gold in recent days: from the decline on April 7 to the remarkable return of 10, which has brought the yellow metal to sail over $3,100 an ounce.

 

https://goldprice.org/gold-price-chart.html

 

In the next few days, investors will closely monitor trade negotiations during the duty suspension period. For the time being, the tariffs on European exports remain at their basic level of 10%, which entered into force on 5 April, despite the retaliations prepared by the EU. 

The climate of uncertainty that agitates the markets and the growing commercial tensions between USA and China inflate the wings of gold: the spot is traded at $3,114.37 dollars the ounce, while the metal in delivery in June jumps to $3,135.30.

 

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