Published on 05.09.2018 17:04
The Gold prices pushed higher in early trading on Wednesday as technical buyers stepped in but then proceeded to give up some of those gains later in the trading session, as the US dollar gathered strength on the back of tensions regarding trade wars with China. There was also news out today that South Africa had fallen into recession putting more pressure on the Rand which follows the recent problems with the Turkish Lira, and Argentinian Peso which are also currently in freefall. This has led to further support of the greenback at the expense of gold "The growing frustration towards trade tariffs and what will be the end result of all of this is supporting the gold prices," said Naeem Aslam, chief market analyst from Think Markets. "Secondly, there are some serious concerns about recession, given that South Africa has slipped into it. If emerging markets start to perform really bad, everyone will catch the cold. This should support the gold price." He added. Although trade tariffs are expected to support the US dollar in the long run, many analysts believe, as the situation unfolds and countries like China begin to retaliate, gold will once again be favored as a safe haven. This may be the reason why gold has been such in such a tight trading range over the last 3 weeks as traders enter positions on dips in anticipation of the upcoming rally.