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Gold Surges After China Announces Tariffs on 130 US Goods

April 2, 2018 at 16:35 by Andrew Moran

Investors are returning from their long Easter weekend with gold futures surging more than 1%. Traders are parking their money into safe-haven assets after China announced new tariffs on 130 US products, which has many fearing that there are renewed tensions in the global trade war.

June gold futures advanced $16.39, or 1.24%, to $1,343.70 per ounce at 16:14 GMT on Monday. The yellow metal slipped 2.1% last week thanks to positive economic news and the market anticipating China-US trade tensions to erode. Gold prices were up 1.4% in the first quarter of 2018.

Silver, the sister commodity to gold, is also rallying to kick off the trading week. May silver futures climbed $0.322, or 1.98%, to $16.59 an ounce. The white metal recorded a 1.9% weekly loss last week and shed 5.1% in the January-to-March period.

China has apparently followed through on its promise to retaliate on President Donald Trump’s recent tariffs on steel and aluminum imports. The world’s second-largest economy slapped levies on 130 US goods, including 15% on fruit and 25% on pork. The leading stock indexes are plummeting on the announcement.

US manufacturers are still booming, but the industry index slipped in March. The Institute for Supply Management (ISM)’s manufacturing index tumbled to 59.3% last month, down from 60.8% in February, a 14-year high. Any reading over 50 is generally positive, suggesting that companies are expanding rather than contracting.

Gold’s gains were capped by a stronger US dollar as the greenback rose 0.12% to climb above the crucial 90.0 threshold. A rising buck is bad for dollar-denominated commodities like gold and silver because it makes it more expensive for foreign investors to purchase.

Other metals were mixed on Monday. May copper futures rose $0.025, or 0.83%, to $3.0505 per pound. May platinum futures increased $4.00, or 0.43%, to $936.60 an ounce. May palladium futures plunged $15.90, or 1.68%, to $927.90 an ounce.

If you have any questions and comments on the commodities today, use the form below to reply.

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