Trade Wars Escalate; Gold Has No Reaction
On Tuesday afternoon, PresidentTrump issued a new round of tariffs on $200 billion of Chinese goods, sendingequities to a 200-point sell-off in less than five minutes. This happened at4:55 p.m. EDT as the extended futures session was about to close.
The selling continued overnight,adding another 200 points to the downside with the VIX popping 1.00 higher.While all this action was going on, gold drifted lower and is back under $1,250.
We remain cautiously bullish fromthese levels but are watching the $1,240 level with great concern. If goldtakes out the $1,238 low, it could go a lot lower. For now, the risk-rewardfavors being long gold but the question is: why is the gold trade so muted herewith the global economy under stress?
Contributing tokitco.com
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