For a moment, it seemed that a trade war with the EU was returning — but it didn’t happen. Instead, precious metals are once again on the rise.
The Tariff Issue Returns
Over the weekend, the topic of American tariffs unexpectedly resurfaced. Donald Trump initially expressed his frustration on social media, simultaneously threatening to raise current tariffs from 10% to 50% starting June 1st. The next development was news of talks with the President of the European Commission. However, after that, the situation returned to the previous scenario. We now have “reduced” tariff rates extended until July 9th. The term “reduced” is relative because initially, there were 20% tariffs, which have now been lowered to 10% for the duration of negotiations until July 9th. Higher tariffs, however, remain in place on steel and aluminum.
What about the market reaction? The US dollar is once again being sold off in the currency markets. For the first time since April, the euro surpassed 1.14 USD. Investors do not believe in the actions of the US administration. It is worth remembering that trade balance data is released with a significant delay — the April figures will only be published in June. These data will already reflect the impact of tariffs and the weaker dollar on the deficit.
Gold Returns to Favor
Recent times show that investors are seeking risk and are not afraid of it. We’ve seen significant rebounds on major stock exchanges despite last week’s downward finish. This trend has also appeared in the cryptocurrency market and among precious metals, particularly gold. Gold prices have risen substantially once again. After climbing from around $3,125 per ounce, prices have already reached $3,360. The all-time record from April stands at $3,509. Considering the pace of changes in just a few days, we may soon witness new all-time highs for gold prices.
Positive Data from Canada
On Friday, retail sales data from Canada were released, showing a 0.8% increase, which was better than the expected 0.7%. However, it is important to note that this growth was mainly driven by automobile sales. The indicator excluding vehicles actually fell by 0.7%. Nevertheless, the markets took this as very good news for the Canadian dollar, leading to a clear strengthening. Before the data release, the Canadian dollar hovered around 2.71 PLN, and shortly after it jumped to 2.73 PLN. This movement was also noticeable against the US dollar, which is the primary benchmark currency for the Canadian dollar.
Maciej Przygórzewski – Chief Analyst at InternetowyKantor.pl
Disclaimer: The information contained in this publication is for informational purposes only. It does not constitute financial or any other advice and is of a general nature not directed at any specific recipient. Before using this information for any purpose, independent advice should be sought.
Source: CEO.com.pl
