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Gold prices have hit a fresh high for 2019. The yellow metal crossed the $1555/ounce today on intensifying trade tensions between the US and China. Year-to-date, the metal’s returns stands at a high 21 per cent now.
In India, given a sharp drop in rupee, gold prices have scaled even higher. On MCX, the gold futures is at Rs 39,319, up 1.4 per cent now over Friday’s close.
Read more:Gold advances to hit fresh highs in Indian markets
China on Friday announced retaliatory tariffs of between 5-10 per cent on $75 billion of US goods. It also said that a 25 per cent tariff on US automobiles will be reinstated from December 15th. These were in response to Donald Trump’s announcement on August 1st of a 10 per cent tariff on $300 billion worth of Chinese goods.
Related news:China to impose new tariffs on $75 bn of US products
After China’s fresh moves on tariffs, Trump took to twitter making a series of comments that sent global markets into jitters.
US treasury yields drop
The US 10 year treasury yield has witnessed a sharp slide. It is at 1.4543 per cent, down from 1.6131 on Thursday. The 2-year treasury yield is at 1.4588. The spread between the 10-year Treasury yield and the 2-year yield inverted multiple times throughout Friday – which sent alarm bells ringing for investors as this is a sign of recession.
There are now expectations that the Federal Reserve will be under pressure to cut rates in its next meeting and start a rate easing cycle. Currently, the Fed fund futures show market expectations for a 25 basis points rate cut on September 18th.
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