The gold price rallied in early trading on Friday, gaining $6 (+0.4%) to about $1,323 an ounce.
This came as COMEX gold futures surged better than $20 following the lowest closing price of 2018.
Spot silver added 0.2% (+3¢) to $16.49/oz.
Platinum prices switched direction early in the session, falling 0.2% to $962/oz. It was the lowest in about two months.
Meanwhile, palladium opened flat, trading near a three-week low of $980/oz.
Trump “Trade War” Hits Equities Hard
Stocks responded poorly to yesterday’s announcement of new tariffs by President Trump.
The president plans to use his executive authority to impose steep tariffs on imported steel (25%) and aluminum (10%).
Protecting U.S. trade interests has long been part of Trump’s economic platform.
The turn toward more protectionist trade policies sent stocks plunging during Thursday’s session.
Some analysts believe the move is setting the stage for the possible emergence of a trade war. Such a possibility sent equities sharply lower across the globe.
Indices were down more than 1% in Europe and fell even farther into the red in Asia last night.
The Dow Jones and S&P 500 lost more than 1% for the third consecutive trading day. All 11 sectors of the S&P were in negative territory.
Technology stocks also slumped as the Nasdaq slipped below its 50-day moving average.
Markets Turn Toward Safe Havens as Losses Mount
Accordingly, the VIX volatility index rose sharply amid the considerable downturn for equities. The popular “fear gauge” surged over 11% yesterday and is up an astounding 50% for the week.
Investors rushed for safe havens instead: the 10-year Treasury saw its yield drop nearly seven basis points to about 2.80%, its biggest one-day gain in seven months.
Yields were up two basis points on Friday to 2.83%. European bonds continued to see solid demand, however.
The dollar reversed its recent rally amid the talk of tariffs and trade wars. The DXY index lost 0.4% on Thursday and dropped another 0.4% on Friday morning to trade below 90.0.
Both the euro and Japanese yen jumped against the dollar. The euro moved back above $1.23 while the yen surged 0.7% to trade at ¥105.5, its highest in roughly 17 months (since November 2016).
The British pound sterling was flat just below $1.38 as Prime Minister May is laying out her priorities for the terms of Brexit.
It remains to be seen how May’s counterparts in Brussels will respond.
For commodities, a weaker dollar didn’t provide much help. Both crude oil benchmarks lost more than 1% yesterday, closing at their lowest in over two weeks.
WTI crude was down to $60.80/bbl and Brent crude traded at $63.50/bbl.
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