Classifieds powered by Gulf News

Trade jitters continue to impact US equities

Gold has been witnessing tough resistance around the $1,350 level

Image Credit: AFP
The New York Stock Exchange. Gold prices have been trading in the range of $1,100-$1,400 (Dh4,040-Dh5,142) an ounce since 2013, after hitting levels of more than $1,800 in 2011.
Gulf News

Dubai: Rising threats of more tariffs by the United States and China, which wield the potential to adversely impact growth, are expected to continue keeping global equities on tenterhooks.

US President Donald Trump threatened to add another $100 billion (Dh367.3 billion) of tariffs on Chinese goods, upping the ante in the trade war, after which China said it was fully prepared to respond with a “fierce counter strike” of fresh trade measures.

The Dow Jones Industrial Average tumbled 2.34 per cent to close at 23,932.76. The S&P 500 index closed at 2,604.47, down 2.19 per cent.

“Markets may continue to remain sensitive to trade rhetoric until there are clearer signs that tensions are not escalating,” Mike Ryan, chief investment officer for the Americas at UBS Wealth Management, said.

“However, keep in mind that the announced tariffs to-date are very small relative to the size of the US economy. Further, the most recent round of tariff announcements related to US intellectual property and market access for US firms in China, even if implemented, will not go into effect for a few months,” Ryan added.

UBS is overweight on global equities.

Golden resistance

However, analysts are not happy with the rise in gold prices. Gold is considered as a safe-haven asset in uncertain times.

International spot gold has been witnessing a tough resistance over the $1,350 (Dh4,958.55) an ounce area. Gold prices gained less than 1 per cent in the past 30 sessions, compared to average losses of 3.8 per cent on the Dow Jones index.

“Gold’s recent performance has once again been disappointing the bulls, [which] have been backing the yellow metal through increased long positions in both futures and exchange-traded products,” Ole Hansen, head of commodity strategy, Saxo Bank said in a note. “A dismal relative and absolute performance among the industrial demand-dependent white metals of palladium, platinum and silver has emerged as a drag on gold’s ability to move forward and properly challenge a key band of resistance above $1,355 an ounce.”

Gold prices have been trading in the range of $1,100-$1,400 (Dh4,040-Dh5,142) an ounce since 2013, after hitting levels of more than $1,800 in 2011.

Loading...