The U.S. dollar fell to its weakest since mid-June and gold prices have soared as a result, according to a Reuters report.
Spot gold reached $1,258.61 an ounce, while the dollar index fell to a three-and-a-half week low after reports showed slow wage growth. Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, dropped to 802.24 tonnes Friday, a .15% loss.
Although the U.S. economy produced more jobs in June, inflation pressures should keep the Federal Reserve on track towards higher interest rates for the remainder of 2018.
On Friday, the U.S. and China exchanged blows as each country hit $34 billion worth of tariffs on each other’s goods. The report said that the odds of the two countries coming to a truce are highly unlikely.
A day before, President Donald Trump said he would consider imposing even more tariffs reaching more than half a trillion dollars.
“Some short-covering has likely ensued given certainties over the U.S.-Sino trade tensions on Friday. Still, the uptick in risk appetite into the week may be short-lived if more trade tariff threats are seen into the week ahead,” an Oversea-Chinese Banking Corporation Limited analyst Barnabas Gan told Reuters.
Meanwhile, in the U.K., Brexit Secretary David Davis has resigned, leaving Prime Minister Theresa May in a perilous position. Gan hinted that Davis’ resignation “may raise some concerns amongst market-watchers depending on how the overall Brexit issue progresses.”
Other precious metals rose, too. Silver swelled to $16.11 an ounce and platinum increased to $850.15 per ounce. Palladium inched to $957 an ounce.