'Winnerless Trade War' To Push Gold Above $1,400 - Rick Rule
(Kitco News) - Gold could jump above $1,400 an ounce this year, with investors attracted to the safe-haven metal amid escalating fears of a global trade war, said CEO of Sprott U.S. Holdings Rick Rule.
The yellow metal prices are often guided by the direction of the U.S. dollar and any loss of confidence in the American currency could result in a rush of gold buying, Rule told Bloomberg last week.
“The most important determinant of the gold price has been international confidence in the U.S. dollar and in particular, the U.S. dollar as expressed by the U.S. 10-year Treasury,” Rule said. “The fact that the U.S. seems to be bound to engage in a zero-sum trade war has begun to strike people as something that’s bad for everybody in the world, not just the U.S. The potential for a winnerless trade war certainly gives cause to some concern.”
The purchasing power of the dollar will be carefully monitored as things escalate, Rule pointed out, noting that American debt relative to savings will weigh heavily on investors’ minds.
Another major event in 2018 could be the bonds bull market coming to an end, Rule added.
On Tuesday, gold prices gave up most of Monday’s gains. And as Asian markets opened early Wednesday, Comex June gold futures were trading at $1,336.90 an ounce, down 0.03% on the day, while spot gold on Kitco.com was at $1,331.60, down 0.04% on the day.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.2924175530478188)
The Trump administration announced 25% tariffs on Tuesday, targeting 1,300 of China’s industrial technology, transport and medical products.
This came a day after China introduced duties on 128 U.S. goods, including frozen pork, wine, fruits and nuts as response to new U.S. steel and aluminum tariffs imposed in March.
By Anna GolubovaFor Kitco News
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agolubova@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.