Gold has posted losses in the Tuesday session. In North American trade, the spot price for one ounce of gold is $1266.59 down 0.39% on the day. On the release front, the Richmond Manufacturing Index improved to 20 points, above the estimate of 15 points. This marked a 3-month high. As well, CB Consumer Confidence dropped to 126.4, shy of the estimate of 127.6 points. On Wednesday, the focus will be on durable goods orders.
There is widespread concern among central bankers that recent protectionist moves could hamper global growth and financial stability. This was the message on Sunday from the Bank of International Settlements (BIS), which acts as an umbrella group for some 60 central banks. The BIS also warned that the escalating trade war could have negative side effects on the currency markets. At the same time, the BIS expressed support for the Federal Reserve raising interest rates gradually and for the ECB heading towards normalization as it winds up its massive asset program.
The escalating trade war between the U.S and China has spooked investors and sent global equity markets sharply lower. Although gold, a safe-haven asset, usually benefits from geopolitical crises, such has not been the case this time around. Instead, this latest round of trade battle rhetoric has boosted the U.S. dollar, which continues to gain ground against a basket of currencies. In essence, investors and traders have been betting on the greenback rather than on gold. On Thursday, gold dropped to $1261, as it recorded a new low for 2018.
