President Donald Trump recently announced steep tariffs on imported steel and aluminum which generated a backlash of threats regarding an international trade war. Donald Trump made it clear on twitter that if the world wants to go down that road, the United States would come out on top.
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win,” Trump tweeted Friday morning. “When we are down $100 billion with a certain country and they get cute, don’t trade anymore – we win big. It’s easy!
With this protectionists policy in play, the big question is: “Is a floor on gold now on?”. It is currently up more than 1.6% year to date. Market participants will now shift their focus towards RBA, BoC, BoJ, and ECB as they have key central bank rate decisions this upcoming week. Next Friday, wage growth numbers will be released which sets the stage for the central focus for the Federal Reserve, inflation outlook. With the perceived threat of inflation and looming geopolitical risks, is the time ripe for Gold? I guess we will find out soon.
