Gold has posted strong gains in the Monday session. In North American trade, the spot price for an ounce of gold is $1336.94, up 0.89% on the day. In economic news, ISM Manufacturing PMI dropped to 59.3, short of the estimate of 60.1 points.
US indicators ended the week on a mixed note. Unemployment claims impressed, dropping to 215 thousand. This easily beat the estimate of 230 thousand. Consumer confidence also improved, as UoM Consumer Sentiment rose to 101.4, breaking past the 100-barrier for the first time since October. However, the indicator missed the estimate of 101.9 points.
The tariff battles continue, with China firing the latest shot. On Monday, China responded to recent US tariffs, imposing its own duties on a range of US goods, including frozen pork and wines. This move is bound to escalate tensions between the two economic giants, and has raised fears that a new global trade war could be underway. If the tit-for-tat measures continue, both the US and Chinese economies could suffer, which could lead to a global slowdown. Gold is sensitive to geopolitical crisis, as investors tend to snap up safe-haven assets such as gold during times of uncertainty. If tensions worsen between China and the US, gold prices could continue to move upwards.
