Gold has recorded sharp losses in the Monday session. In the North American session, the spot price for an ounce of gold is $1323.67, down 0.93% on the day. In economic news, Existing Home Sales improved to 5.60 million, above the estimate of 5.55 million. This marked a 4-month high. On Tuesday, the key event is CB Consumer Confidence.
What’s good for the greenback is often bad news for gold, and this has been the case on Monday. The US dollar has posted road gains to start the week, courtesy of US Treasury bills, which pushed above the 3-percent threshold for the first time since January 2014. With treasury spreads widening over European and Japanese yields, investors have propped up the greenback, and gold prices have slipped to their lowest level in 2 weeks.
The stock markets have been rocked by volatility in recent weeks, in response to tariffs which the US and China have imposed on the other. US President Trump has threatened to slap tariffs on up to $150 billion on Chinese goods, and China has promised to respond with heavy tariffs on US imports. The escalating crisis has raised fears that a trade war between the two economic giants could slow down Chinese growth and trigger a global recession. However, US Treasury Secretary Steven Mnuchin sought to lower the rhetoric on the weekend, saying that he was considering a trip to China, adding he was “cautiously optimistic” that the two sides could resolve the trade dispute. If the US and China can patch up their differences, the safe-haven Japanese currency could continue to lose ground.