Gold Lower As Capital Flows Into the US$ On Trade Concerns
(Kitco News)- The dollar continues to attract capital flows as stresscontinues to increase in some emerging markets. Global consequences to tradewith the impending $200 billion in Chinese tariffs due to take effect thisThursday have pushed capital into the perceived safehaven of dollar-denominated assets.Gold dropped on dollar strength and both silver and the PGMs have been hit, not only by gold's weakness, but also withthe perception that slowing international trade will diminish demand for theindustrial metals complex. Should the tariff deadline with China be mitigatedbefore Thursday, we would expect a significant bounce in the latter group. Goldneeds to recapture the $1,197 level to generate interest. A break below the$1,192 area suggests a retest of $1,180 is probable. Expect increasedvolatility as global markets are becoming increasingly risky.
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