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Trump effect? Gold performing well as dollar weakens with trade deals

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Gold prices are shooting upwards as the US dollar weakens. The precious metal is enjoying a wave upwards as trade tensions between the United States and China slack in the wake of positive talks. According to one report from CNBC, gold is currently trading at its highest rate in three weeks, while investors are beginning to sell off their US dollars.

At the time of this writing, spot gold is selling for 1,232.69 per ounce — which is about one percent higher from last week. Gold futures performed even better, crossing the $1,238 level and gaining one percent. Gold wasn’t the only precious metal enjoying a bump in price. Palladium raised by more than two percent, while silver and platinum also rose.

“We remain committed to the idea that both gold and silver are physical commodity markets in need of a lifting of global economic headwinds from trade issues, and the news over the weekend certainly moves the needle in that direction,” wrote Zaner Precious Metals analysts, according to a report from Market Watch.

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Gold prices are shooting upwards as the US dollar weakens. The precious metal is enjoying a wave upwards as trade tensions between the United States and China slack in the wake of positive talks. According to one report from CNBC, gold is currently trading at its highest rate in three weeks, while investors are beginning to sell off their US dollars.

At the time of this writing, spot gold is selling for 1,232.69 per ounce — which is about one percent higher from last week. Gold futures performed even better, crossing the $1,238 level and gaining one percent. Gold wasn’t the only precious metal enjoying a bump in price. Palladium raised by more than two percent, while silver and platinum also rose.

“We remain committed to the idea that both gold and silver are physical commodity markets in need of a lifting of global economic headwinds from trade issues, and the news over the weekend certainly moves the needle in that direction,” wrote Zaner Precious Metals analysts, according to a report from Market Watch.

As precious metals keep climbing, the US Dollar felt a decline — dropping by close to 0.4 percent, according to a report from Investing.com. The dollar is weighed down not only by improving relations with the Chinese but also by the threat of further interest rate raises from the Fed that may or may not happen before the end of the year. If it happens, it will be the fourth such rate increase in 2018.

As rates keep climbing, fewer Americans are applying for more credit. One report from Reuters states that banks are also approving fewer loan applications than they were just 12 months ago. Many of these loans were for mortgage refinance, as well as credit extensions on existing credit cards. In October, the number of Americans applying for mortgage loans fell to an 18 year low.

As for the trade war with the Chinese, Market Watch reports that President Trump agreed to not enforce a 25 percent tariff on the Asian superpower, which was initially slated to happen in January of 2019. Both President Trump and Chinese President Xi Jinping also agreed to a 90-day moratorium on further financial actions. These developments have eased fears that investors had of an ongoing trade war, and many are ditching the greenback for more risky yet profitable investments.

“The U.S.-China trade cease-fire gave traders and investors a double-barrel shot of upbeat news, following last week’s surprisingly dovish comments coming from U.S. Federal Reserve Chairman Jay Powell,” wrote Jim Wyckoff, senior analyst at Kitco Metals, according to CNBC.

About Joseph LaFave View All Posts

Joseph LaFave writes about finance, maritime issues, healthcare, the National Guard, and conflicts around the world. Before becoming a journalist, he worked as an EMT in Florida and as an ESH engineer for Lockheed Martin supporting several DoD and NASA satellites. He holds a Bachelor of Science degree from Florida State University and a Master of Science in Management from Southern New Hampshire University.

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