The US Dollar (USD) remains under heavy fire, which is affecting much of the market landscape, especially in the realm of precious metals. As the USD falls, this change makes more sense – especially in light of China’s announcement to increase tariffs on US imports. This move increases the U.S./China trade war climate. In turn, gold prices have hit record highs, appealing to safe-haven flows during the rising instability present within the financial markets.
Most recently, China more than doubled its tariffs on imports from the United States, raising them from 84% to 125%. This unprecedented increase in trade restrictions not just commodities wise, but has played a role in the devaluation of the USD. Most analysts are interpreting this move as retaliation. They argue that it is intended to hit what they see as the US’s increasingly predatory trade practices. Gold has emerged as one of the most preferred investment options. It is holding firm with powerful daily gains around $3,220, even with a slight pullback from its all-time high of $3,237 established on Friday.
Just as gold prices hold strong in this unprecedented time, the market has seen significant action in cryptocurrency assets as well. Both Curve DAO (CRV) and Aethir (ATH) have recently reclaimed descending trendlines, indicating a shift in momentum and paving the way for additional gains. Recent breakthrough advances could trigger renewed inflow of investor interest within the cryptocurrency space. Despite this, much of the focus remains on old safe-haven assets like gold.
The EUR/USD cross has moved around, retreating from its multi-year peak over 1.1400. On Friday, it floated nicely above the 1.1300 level, an indication of the continued weakening of the USD. This trend is a powerful undercurrent in the markets. It affects the development of currency pairs and leads to higher effort diversification into alternative asset classes.
At the same time, GBP/USD has maintained its upward trend, moving to test the 1.3100-mark in early European trade. This upward movement has been further accelerated by the combination of a weaker dollar and stronger economic indicators coming out of the UK.