Escalation of US – China trade dispute raises gold prices

August 5, 2019

New York (Aug 5)  The international financial markets took the decision of the US to introduce new customs duties on Chinese imports as the beginning of a new wave of tensions in the global economy, according to the weekly summary of the Azerbaijani investment company InvestAZ on trends in the global financial and energy markets, Trend reports.


According to the company’s analysts, the positive effects of the recent decline in interest rates by the US Federal Reserve Bank weakened as a result thereof, and the US dollar began to decline again against the euro. The euro / dollar pair is now changing at 1.1, and analysts believe that the euro’s exchange rate against the dollar may reach 1.12. Moreover, statistical data on the services sector in the Eurozone and the US, which will be published on August 5, 2019, may have an impact on the situation.


The British pound sterling’s rate against the US dollar is also weakening. It is now trading at around $1.22 for 1 pound and may rise to $1.23. Negotiations on a trade agreement between the UK and the US and on Brexit with the EU have an impact on the exchange rate of the pound. Data on the state of the British economy will be published on August 7, 2019. It is expected that the soon-to-be-published data will indicate a slowdown in economic development, which in turn will become another factor weakening the pound.


The rate of the US dollar against the Turkish lira rose against the backdrop of growing fears of further inflation growth in Turkey. A course fluctuating around 5.60TL may rise to 5.73TL if it overcomes the 5.66TL mark. Relevant data on inflation will be published on August 5, 2019.


Oil and other energy sources

A further increase in global political and economic risks has led to a drop in demand for oil on energy exchanges. Brent crude oil in Europe was trading at $61 a barrel, but it may also drop to $56.53 if it falls below the mark of $59.41 a barrel.

Analysts are also waiting for data on US oil and gas reserves, which will be published on August 7, 2019. They believe that this data can have a strong impact on energy prices on commodity exchanges.


Non-ferrous metals markets demonstrate the growth of demand for gold, which is a reliable financial instrument when considering the instability in stock markets. In the conditions of aggravated trade dispute between Washington and Beijing, investors prefer reliable assets. The price of gold may reach $1,460 ($47 per gram) and even $1,469 ($47.2 per gram) per ounce.


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