Safe haven demand slightly boosts gold price… for now
May 8, 2019|
- Gold price slightly higher at $1,282.20, driven by safe haven demand
- No U.S.-China deal can wreak havoc on markets, including commodities
- July Comex Silver trading at $14.765 an ounce
Gold prices were somewhat higher in the U.S. on Thursday morning. The gold price was boosted by safe-haven demand during current geopolitical developments. The gains were, however, restricted by the slowing down of international economic growth.
June gold futures were trading at $1,282.20, while July Comex Silver was trading at $14.765 per ounce.
This took place against a background of world stock markets mostly trading lower overnight. The new higher U.S. tariffs on Chinese products will become effective at midnight on Thursday, with no significant last-minute breakthrough expected.
Yields on international government bonds are also dropping amid worries over an escalation in the U.S.-China trade war and what it will do to the global economy, including commodity markets.
The Chinese yuan dropped to the lowest level since January against the USD today.
The U.S.-China conflict is currently at the forefront of world politics, although Iran’s government announcing this week it will no longer comply with certain undertakings it made in the 2015 UN nuclear deal is probably just as, or even more important.
China’s consumer price index, meanwhile, increased by 2.5% in April, pushed by a 14.4% increase in pork prices. Factory-gate prices increased by 0.9% in April.
From a technical point of view, the gold bears rule in the short term. On the daily bar chart, one can clearly see a 2.5-month downtrend. The next upside price target for those with a bullish view is above $1,300.
For those with a negative market sentiment, the next support level for gold is at $1,250.