HomeContributorsFundamental AnalysisGold Steady, Markets Await Unemployment Claims

Gold Steady, Markets Await Unemployment Claims

Gold has edged higher in the Wednesday session. In the North American session, the spot price for an ounce of gold is $1350.29, up 0.23% on the day. In economic news, there are no major indicators. On Thursday, the US releases unemployment claims and the Philly Fed Manufacturing Index.

After last week’s strong fluctuations, gold prices have steadied this week. The volatility has been closely connected to escalating tensions over a chemical attack by the Syrian government on rebel positions. There was uncertainty throughout last week about whether the US would respond, but the markets have settled down since a US-led strike hit Syrian weapon centers on the weekend. Investor risk appetite has improved, but concerns that tensions could quickly reignite have meant that investors are not dumping gold holdings in favor of riskier assets just yet. After the weekend attack, President Trump declaration of “mission accomplished” means that things will remain relatively quiet in Syria. However, further chemical attacks by the Syrian regime could trigger a response from the US and its allies, which could result in volatility in the markets, similar to what occurred last week.

The recent trade battle between the US and China has been overshadowed by events in Syria, but the threat of further tariffs between the world’s largest two economies could again roil the markets and in turn, send gold prices higher. Another salvo was fired on Tuesday, as China slapped a tariff of some 179% on US sorghum crops, which is a livestock feed. China imports about $1 billion of sorghum annually, and the tariff, if it remains in place, will essentially halt US exports of sorghum to China. The Chinese government has threatened to impose tariffs on US soybean exports, valued at some $12 billion each year. If the US opts to retaliate, the specter of an ugly trade war between the US and China could spook investors and send gold to higher levels.

MarketPulse
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