Gold Drops as Traders Await Tariff News

Continuing a reversal which started on Friday afternoon after the price approached $3,500/oz, Gold is down 2.3% this morning. The yellow metal has become more volatile due to speculation over whether the Trump Administration will launch tariffs on imports of bullion; and if so, how much? Gold may remain volatile in the short term until more direction on this comes from the White House.

Politics may influence the markets through the week with trade talks between the US and China ongoing and a decision needed on whether to extend the moratorium on new tariffs coming soon. Friday brings the big summit meeting between US President Trump and Russian President Putin on Ukraine.

There are some notable events on the economic calendar as well. Australia’s central bank is expected to announce a 0.25% interest rate cut tomorrow morning. Tuesday also brings US Consumer Prices, with Producer Prices to follow on Thursday, keeping inflation top of mind. Friday features retail sales and industrial production numbers for the US and China.

We are now past the peak of earnings season, with this week’s calendar lighter and dominated by small and medium-sized companies. Later this month, results are expected from US retailers and Canadian banks.

Outside of Gold, the week is off to a quiet start. US index futures are up 0.1% to 0.3%, building on Friday’s US index gains of 0.5% to 1.0%. European trading is mixed with the DAX down 0.1% and the FTSE up 0.2%. Asia-Pacific trading saw the Nikkei rally 1.8%. In commodity action Crude Oil is up 0.5% while Copper is down 0.6%. The Loonie and Euro are both down 0.2% so far today.

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