- Germany has also planned to host Erdogan for a state visit
- Trump has made the US position even weaker which presents a much higher geopolitical risk
- The bull run for the dollar index has eased off a little
European markets and US futures are trading higher as investors have cheered the fact that Turkey has many strong allies who can help the country during its current tough time. These allies are committed to provide support, weather and prevent the country from facing any kind of crisis. Angela Merkel, the true leader of the free world and German Chancellor had a discussion with Turkey and assured the country’s support.
The primary fact is that Turkey is a major trade partner for Germany and it cannot afford to let the country slip into chaos. Moreover, Germany has also planned to host Erdogan for a state visit on September 28th. Just to put things in perspective, the country had nearly €37 billion of bilateral trade only last year and nearly 6,500 companies which are partly or completely owned by Germany operate in Turkey.
Erdogan’s clash with Donald Trump and friendly calls with Qatar and Germany presents a new landscape for Turkey, something which the world is closely paying attention to. Qatar stood up for its rights against Saudi Arabia and assured investors that it is fully capable to grow while facing economic pressure, the country has confirmed $15 billion worth of investment in Turkey.
The only two countries which are left out for the time being are Iran and China. Russia has already shown sympathy towards Turkey and has significant trade relations. Iran and Turkey are major trade partners and by escalating tensions with Turkey. Additionally, Trump has made the US position even weaker which presents a much higher geopolitical risk for investors over the coming future.
Staying with the geopolitical tensions, the trade tariffs spat between the US and China is back in the focus. Chinese commerce minister would travel to the US in late August to discuss the issues on trade.
The bull run for the dollar index has eased off a little but we do not see any convincing move for the gold price which tells us that traders are still very bearish views about the metal. It is likely that the gold price may continue to grind lower and the next important level to watch out for gold is at $1150.
