Recently, the price of gold hit all-time highs on Monday, August 5th, 2019. Along with many currencies including the British pound, the Japanese Yen, the Indian Rupees, the South African Rand, the Canadian dollars, and Australian dollars.
What causes the yellow metal to rise?
Not too long ago, the United States and China were fighting a trade war and influenced the price of precious metals. However, gold had massive 3% daily rallies in other currencies. Recently, President Donald Trump has placed a 10% tariff on the rest of the $300 billion of Chinese imports. For the first time in decades, China has allowed the Chinese yuan to decline and to trade at 7 yuan per U.S. dollar. The escalating trade tensions in the U.S and China is no longer a trade war, but a currency war.
Is China manipulating the currency?
Stock markets worldwide are closely observing the Chinese yuan’s spot price against the 7 per U.S. dollar. The decision by the U.S. Treasury reflects a sharp fall in the value of the Chinese yuan against the dollar. President Donald Trump accuses China on Twitter manipulating its currency:
What is gold’s future?
The currency war is playing a significant role in the gold by breaking all-time highs in several currencies. The gold’s future is bright, whereas there is still an opportunity for the price of gold to aim higher. Gold’s price in every currency seems to be at record highs as long as the currency tension exists. Indeed, investors are looking to drop the Forex market for the security of gold. Many people would sell the dollars and use the money to invest in gold. People need stability in China, so they are selling their currency to buy gold.
Gold spot prices in different currencies
- British Pounds: According to the Kitco’s chart, the British pound has increased by another 0.41% and hit above $1,209.00.
- Japanese Yen: Gold in Japanese yen hit a record high along with spot prices’ jump of more than 1.2%.
- Indian Rupees: Gold in Indian Rupee was also at all time highs at 0.76% increase and a bid of $104,421.70.
- South Africa Rand: Gold in South African Rand are more than 3% on the day and reach an all-time high of $21,961.85.
- Canadian Dollars: Increase 0.96% today and hit above CAD $1,951.95 gold per ounce.
- Australian Dollars: was up 2.40% with a new record high of above AUD $2,175.38 an ounce.
Gold Spot Price correlations
It is crucial to look at the correlation of gold in both the yellow metal and the currency. The spot prices in both elements consider being safe-haven assets. Overall, the country with the most critical economic forecasts and a dovish central bank is likely to see its biggest rally in gold. For more