As we have just seen, analysts fully expect the price of gold to go up not that far into the future however, at present the cost has fallen back from peaks seen earlier this week thanks to a late Wall Street rally.
The stock market was in freefall earlier this week thanks to trade war worries with China and bullish statements from the US government. This led to a period of losses but, after President Trump appeared to state that he may be willing to compromise on China, the dollar began to rally. Shares were also boosted by positive economic data and strong earnings from companies like Walmart and Cisco. With that news in, the markets made three successive days of gains.
Reuters commented on all of the factors leading to this surge, explaining, “Wall Street extended its rally in afternoon trading on Thursday as upbeat earnings and strong economic data put investors in a buying mood, with technology companies leading the charge. All three major U.S. stock indexes were up about 1%, bringing the bellwether S&P 500 to within 2% of an all-time high reached on April 30 … On the economic front, groundbreaking on new U.S. homes increased more than expected in April, according to the Commerce Department, as declining interest rates provided support to the struggling housing sector … In a separate report from the Labor Department, the number of Americans applying for unemployment fell more than expected last week.”
As a result of the strengthening dollar and a more optimistic market, we have seen gold prices fall 9.90 this week, with a 3.60 decrease directly attributed to the rebounding dollar.
This means of course that now is a great time to buy gold while markets remain strong because undoubtedly, more shadows lie on the horizon which will send the price surging again, likely in the not too distant future.
Some larger firms in the US have warned that if the trade war does continue, the higher tariffs on imports will leave them with no option but to increase on the shelf prices, which could leave consumers more reluctant to spend. A threatened US ban on Huawei could also escalate tensions and send the trade war forward full force.