Gold jumps to two-week highs near $1440 on risk aversion
- Gold capitalizes on risk aversion in American trading hours.
- US President Trump announces 10% tariffs on remaining Chinese imports.
- US Dollar Index erases large portion of Powell-inspired gains.
The troy ounce of the precious metal gained more than $20 in the last thirty minutes following US President Donald Trump's tweets regarding the trade conflict with China. The XAU/USD pair touched its highest level in two weeks at $1439.50 and was last seen trading at $1435.65, adding 1.65%, or $23, on a daily basis.
"Trade talks are continuing, and during the talks the US will start, on September 1st, putting a small additional tariff of 10% on the remaining 300 billion dollars of goods and products coming from China into our country," Trump tweeted out. "This does not include the 250 billion dollars already tariffed at 25%."
Market sentiment turns sour
The market reaction to Trump's announcement triggered a flight-to-safety, ramping up the demand for traditional safe-havens. The 10-year US Treasury bond yield, which lost nearly 7%, was last down 5.6% on the day at 1.907%, staying on track to post its lowest daily close since November 2016. Additionally, major equity indexes in the US turned red on the headlines, confirming the sharp shift in the risk sentiment.
In the meantime, the US Dollar Index continued to pull away from the 26-month high that it set at $98.93 earlier today and was last seen erasing 0.2% on the day at 98.38, allowing the pair to continue to push higher.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
