Gold News & Info

Source:Dana Samuelson, American Gold Exchange

AustinGold surged 1.97% or $29 to a new 2019 high today after markets knee jerked to an escalation in the U.S. China trade war this morning. Events unfolded calmly at first with a long-scheduled speech titled “Challenges for Monetary Policy” by Fed Chairman Jerome Powell. Volatility ratcheted up quickly, however, after President Trump sent a tweet, ordering U.S. companies to immediately start looking for an alternative to China. The tweet followed China's announcement late last night they would impose new, retaliatory trade tariffs on the U.S. Gold surged while the DJIA, the dollar and bond yields all fell in the aftermath of the U.S. China trade war escalation.

In his widely anticipated speech in Jackson Hole, WY Fed Chairman Powell said the Fed is "carefully watching developments" in the economy and trying to assess "this complex, turbulent picture" that has emerged since the conclusion of their July meeting. While Chairman Powell assured that the economy was in a "favorable place" he also referred to "eventful" changes and "significant risks" facing the U.S. economy. Risks include the announcement of new tariffs on China (tariffs announced well before today's escalation in the trade war), further evidence of the global economic slowdown, especially in Germany and China, and the continued global decline in long-term bond rates. Citing the unknown nature of what was to come Powell also said there are "no recent precedents to guide any policy response to the current situation".

Chairman Powell remained relatively upbeat, however, stating, "the U.S. economy has continued to perform well overall, driven by consumer spending. Job creation has slowed from last year's pace but is still above overall labor force growth. Inflation seems to be moving up closer to 2 percent". Markets interpreted Chairman Powell's comments about significant risks, however, as dovish, and that the Fed may indeed be leaning towards further interest rate reductions this year.

Overnight China announced they would impose new, retaliatory trade tariffs on the U.S. in two stages beginning on Sept. 1 and again in Dec. of between 5% and 10% on $75 billion of U.S. goods. In addition, China announced they will resume 25% tariffs on U.S. auto imports. With each side escalating both their rhetoric and their actions, the repercussions and increased uncertainty for an already slowing global economy are unknown. Gold and silver both caught strong, safe-haven bids in response. Conversely platinum and palladium both fell on the news of the renewal of the 25% tariff on U.S. auto imports to China. Both metals are used industrially primarily in automobile catalytic converters.

At the Comex close: December gold surged $29.10 to $1,537.60; September silver also surged $0.37 to $17.41; October platinum fell $6.60 to $855.30; and September palladium fell $30.90 to $1454.30 an ounce.