On Monday, 3rd of September, the stock market commotion had been prompted by the fact that Canada and the United States did not reach consensus on the trade agreement. As we reported, the issue should have been settled last Friday, but the negotiations were postponed again. Canada is not interested in signing an unfavorable treaty. The White House designated a time frame — 90 days, during which the treaty with Canada should be signed.
In the photo: Canada’s Minister of Foreign Affairs Chrystia Freeland believes that signing an agreement with the US is appropriate only if it is beneficial for Canada.
Source: © Eric BARADAT / AFP
On Monday, the price of an ounce of gold approached the $1,201 mark.
On Tuesday, 4th of September, the US currency strengthened its growth. The dollar rose against the background of unstable economic development of the world's leading countries. Despite a significant jump-start of American production in August, overall, the indicators for the year have slightly increased.
The representative of the US Federal Reserve James Bullard repeatedly spoke against raising interest rates. On Tuesday, he expressed his concerns and appealed for a careful monitoring of the economic data changes.
CEO of the Federal Reserve Bank of St. Louis James Bullard believes that the rates have already reached the required level.
In the photo: James Bullard considers it unreasonable to raise the Fed's rates.
On Tuesday, the price of an ounce of gold was $1,191.
On Wednesday, 5th of September, fears about trade disagreements intensified. The US and Canada resumed negotiations in Mexico City to review the nuances of a new trade agreement. The most important issue that both sides are currently working on is an accord on balanced wages in America, Canada and Mexico.
This stage of negotiations is not the last one. A process of further coordination may drag on for several months.
On Wednesday, the price of an ounce of gold was $1,196.
On Thursday, 6th of September, negotiations between the US and Canada resumed. President Donald Trump threatens to introduce new tariffs on import goods from China. The total sum of imported goods can reach $200 billion. Economic news supported the buyer’s interest on the precious metals markets.
Analysts of the leading Scotland bank ScotiaMocatta noted that any weakening of the dollar could instantly lead to an aggressive rise in gold prices. According to the experts of the bank, if the world's leading countries take action to protect themselves from the crisis, this will slow the tightening of the monetary policy. The main driver of gold prices’ decline remains the US dollar, which gets support because of Trump's policy and the Fed's actions.
On Thursday, gold increased in price: $1,200 per ounce.
On Friday, 7th of September, fears arose in the market over the assumption that Donald Trump might reconsider relations with Japan. The Wall Street Journal newspaper reported that the Land of the Rising Sun may be next in the list of those countries with whom the US president will begin discussing trade relations. Due to the possibility of an emerging trade conflict, the dollar’s price immediately began to decrease, which positively affected the price of gold.
On Friday, an ounce of the precious yellow metal was worth $1,195.
On Monday, 10th of September, the price of gold was $1,192.
The unfinished negotiations between the US and Canada, the geopolitical turmoil in Turkey and Argentina — all the above-mentioned factors reflect the instability of the world economy. There is a double devaluation of national currencies witnessed on the largest emerging markets, which proves the existence of economic problems in both countries. Against the backdrop of inflation, citizens of Turkey and Argentina save their savings by purchasing gold.
Senior analyst at Bloomberg Intelligence Mike McGlone noted that the meeting of the Federal Reserve System on September 25-26 could be one of the positive triggers for the growth of gold prices. Currently, there are a 99,8% chance of another rate hike this month.
"The Fed's interest rate hike in September should be positive for gold, prices may recover to $1,165 an ounce," McGlone said. "We believe that prices are likely to rise soon."
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