The rollercoaster that is the US-China trade war is peaking again with both parties now contradicting earlier announcements that an agreement had finally been reached. Last week, officials from the US and Chinese governments confirmed that they were close to settling the dispute with terms agreed. This was later denied by President Trump who contradicted his own officials by saying no agreement had been reached. While the markets reacted positively to news that the more than a year long trade war could be coming to an end, they were dealt a blow yesterday (Thursday) when both sets of officials said an agreement was not on the table.
This setback has once again bolstered gold, with the precious metal seeing a spike in safe haven demand yesterday (Thursday) as worries again emerged about the further impact the trade war will have on the sluggish global economy.
If you had headed our advice to buy last week, you’ll have seen price increases throughout the day yesterday. If you haven’t yet invested, now is still a great time to do so as remarks from American and Chinese spokespersons suggest that there is still a long way to go. This is bad for markets who can’t see an end in sight to a battle which has seriously impacted the manufacturing sector but good news if you plan to buy gold as the ongoing disagreement will continue to drive safe haven demand for the precious metal.
So far, it looks like the trade war will continue for at least a few more months as the latest updates suggest China is balking at the level of US agricultural product the US is insisting it purchases as part of any trade agreement while on the US side, officials refuse to roll back all tariffs on Chinese goods imported into the country; a caveat which is non-negotiable for a Chinese signature on a new trade agreement.