Gold continues to shine as the tariffs war now centers around US and China

Gold is up another 1.3% today as it climbs above $3,100 ahead of European trading. Trump pausing reciprocal tariffs for 90 days took some edge off gold but as the tariffs war now turns to more of a trade war between US and China, we are continuing to see gold stay bid in the aftermath.

Amid all the trade uncertainty and the fact that China is also opting to devalue the yuan in response, gold can still find reasons to benefit no matter the circumstance. The recent fall from record highs only adds to that allure as gold bugs had been waiting for some form of pullback/correction to step back in.

As things stand, it’s still hard not to find reasons to stay bullish on gold. Trade tensions and uncertainty are still going to persist for longer and more so if US and China can’t play nice. Then, you have central banks still stocking up on the precious metal and also China baiting the US into a currency war. Adding to that is the fact that ETF purchases in gold is arguably still needing to play catch up to price, though that’s an argument that can work both ways.

But for me, the fact that US and China are still butting heads on trade and the latter is opting to go down the route of devaluing its currency is a strong enough reason to retain a more bullish outlook.

This article was written by Justin Low at www.forexlive.com.