Gold has recorded strong gains in the Tuesday session. In North American trade, the spot price for one ounce of gold is $1234.11, up 0.99% on the day. There are no key releases on the schedule. The Richmond Manufacturing Index dropped sharply to 15 in October, down from 29 points in September.
Global equity stock markets are seeing red on Tuesday, as geopolitical concerns and soft third-quarter earnings have dampened risk appetite. U.S markets are recording sharp losses, as poor earnings reports from industrial giants Caterpillar and 3M have pulled Wall Street lower. Investors are also nervous over weak Q3 growth in China and tensions between Saudi Arabia and the U.S over the death of a Saudi dissident in the Saudi consulate in Istanbul. Investors have responded by flocking to gold, a traditional safe-haven in times of crisis. We could see gold prices continue to fall in the North American session.
The trade war between the U.S and China continues to simmer, with the markets nervous that that trade tensions could escalate. The U.S Treasury Department released its semi-annual report on foreign exchange rates on Thursday, and there was some relief in the markets as the report did not name China as a currency manipulator. Still, the report said that the U.S was “deeply disappointed’ with that China refuses to disclose the extent of its foreign currency intervention. The Chinese yuan has slipped some 9 percent since April, and U.S officials are concerned that China has deliberately weakened the currency in order to counter U.S tariffs on Chinese goods, and will continue to monitor China’s currency practices.
