Gold Is 3% Higher This Week As Dollar, U.S. and Global Economy Weaken
Gold prices jumped to $1,345 per ounce soon after the U.S. non farm payrolls showed that the U.S. created a meager 75,000 jobs in May, taking it’s weekly gain to 3%.
Gold prices consolidated on this week’s 2.2% rise by today and if the gains are sustained, gold is headed for it’s best week this year.
Gold has gained in dollars this week and also rose in other currencies (see LBMA prices below) due to concerns about the slowing U.S., UK, EU and Chinese economies and indeed the global economy.
Today’s U.S. non-farm payrolls confirms that the U.S. economy is weakening. There may the usual price volatility and manipulation after the number but investors should fade that noise and focus on gold’s increasingly evident, positive, long term fundamentals.
The U.S. and other debt saturated economies were already vulnerable towards the end of this economic cycle. The very real trade war risk is impacting already fragile consumer and business confidence. It is only a matter of time before this takes its toll on still frothy risk assets.
Expectations of a much more dovish Fed and the escalation in global trade conflicts should see gold continue to outperform as it remains very undervalued compared to U.S. stocks and other assets.
Spot gold was flat at $1,333.90 per ounce and it’s 2.2% gain so far this week and is set to be its best weekly percentage gain since late-March. Gold has risen by $60 an ounce after Washington’s threat of tariffs on Mexico, while recent very poor economic data has increased the likelihood of interest rate cuts in the U.S. and in other major economies.
Trump’s threat to hit China with tariffs on at least $300 billion in Chinese goods after a meeting of leaders of the world’s largest economies at the G20 later this month will keep markets on tenterhooks and should see gold eke out more gains in the coming months.
LBMA Gold Prices (USD, GBP & EUR – AM/ PM Fix)
06-Jun-19 1336.65 1335.50, 1053.15 1051.17 & 1189.62 1185.92
05-Jun-19 1337.75 1335.05, 1052.01 1049.22 & 1185.38 1184.99
04-Jun-19 1323.60 1324.25, 1045.51 1043.77 & 1177.47 1177.26
03-Jun-19 1313.95 1317.10, 1039.47 1042.35 & 1175.99 1175.38
30-May-19 1276.45 1280.95, 1010.44 1015.92 & 1146.25 1151.70
29-May-19 1283.50 1281.65, 1016.02 1013.27 & 1151.04 1150.67
28-May-19 1283.90 1278.30, 1012.87 1008.20 & 1146.91 1142.29
27-May-19 UK Holiday
News and Commentary
Gold Extends Gains to a 7th Session, the Longest Winning Streak in Over a Year
Gold Climbs Towards 2019 Highs on Expectation of Fed Rate Cut
NY Fed President John Williams Rails Against Low Inflation and Calls for Central Bank Action
Trump to Decide on $300 Billion China Tariffs After G20 Meeting
Dollar Dump? Russia & China Agree to Bilateral Trade in National Currencies During Putin-Xi Meeting
Watch video here
Ambrose Evans-Pritchard: Deflation Alert in Europe as Markets Lose Faith in ‘powerless’ ECB
Deflation Alert in Europe as Markets Lose Faith in ‘powerless’ ECB
Investors Signal Draghi Is Running Out of Time and Ammunition
‘In Gold We Trust’: Waning Confidence in US Sends World’s Central Banks on Buying Spree
Gold Miner May Fly Thousands of Ounces of Gold From Mexico to Canada to Avoid Trump’s Tariffs
Quant-tastrophe Looms: Factor Vol Soars Above August 2007 Disaster
Rabobank: “We’ve Lost Track How Many Times Central Bankers And Key Economists Spread Blatantly Fake News”
