BULLION:
The tensions between the US and China are
likely to increase amid comments that President Trump is preparing to impose an
additional $200bln of tariffs on Chinese goods as soon as next week. This in
turn, is likely to prompt a retaliation from China, as has been the case on the
previous occasions. Consequently, USDbuying
could prevail over demand for gold, which puts the psychological $1200/oz level
at risk of a break. Alongside this, Trump also rejected an offer from the EU to
eliminate tariffs on cars, provided the US did the same. These comments from
Trump prompted EU’s Juncker to state that the EU would be willing to raise
tariffs if the US carried out such action. In turn, trade war concerns are back
at the forefront of investors’ minds, spelling bad news for gold bulls.
ENERGY:
Oil prices slipped on Friday as concerns over
the impact of a global trade war depressed sentiment, although impending U.S.
sanctions on Iran and falling Venezuelan output limited losses. U.S. President
Donald Trump threatened in an interview with Bloomberg News on Thursday to
withdraw from the World Trade Organization, his latest salvo in a deepening
dispute between the United States and its major trading partners. Such a move
would undermine one of the foundations of the global trading system, which the
United States was instrumental in creating. are worried that rising trade
barriers between the world's major economies will drag on global growth and, by
extension, erode energy demand. have to wonder if it (crude) can sustain these
prices in a world where President Trump doubles down on his battle with the EU
and China at the same time," said Greg McKenna, chief market strategist at
futures brokerage
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