Beijing has imposed retaliatory tariffs on the United States, escalating tensions in the ongoing trade war between the two economic giants. The Chinese government announced a 15% tariff on less than $5 billion worth of US energy imports, including coal and liquefied natural gas (LNG). Additionally, a 10% fee has been levied on American oil and agricultural equipment. These actions come in response to US tariffs issued over the weekend. As a result, the US Dollar (USD) is gaining strength, driven by renewed haven demand. Meanwhile, gold prices have reached a fresh record high of $2,830.70 on Monday.
Central banks from emerging economies such as China, India, and Turkey have been rapidly increasing their gold reserves. This move underscores the growing importance of gold as a hedge against economic uncertainty and currency fluctuations. The precious metal has historically played a crucial role in human history as a store of value and medium of exchange. As tensions rise, the markets are experiencing increased volatility and whipsaw movements, with technical analysis indicating potential resistance levels for gold at $2,839 and $2,864.
The low of Monday's chaotic market opening at $2,772 is expected to act as the next support for gold. Investors are keenly watching for any developments that could further impact gold prices. The market remains cautious amid concerns about potential US tariffs on the Euro area. Gold continues to hold its position as a safe haven asset, with central banks being the largest holders.
The trade war fears were reignited as President Donald Trump's tariffs on China took effect, leading Beijing to retaliate with counter-tariffs. This ongoing conflict has fueled uncertainty in global markets. The CME FedWatch tool currently shows an 86.5% probability of maintaining interest rates at the March 19 meeting, compared to a 13.5% chance of a 25 basis points rate cut.
XRP's weighted sentiment and funding rates have plummeted to significant lows, indicating a potential bottom for the cryptocurrency. The ripple effects of the trade war are being felt across various sectors, including cryptocurrencies and commodities.
The December JOLTS Job Openings report anticipates a decrease in job openings to 8 million, down from 8.098 million in November. This expected decline reflects growing concerns about the economic impact of the trade war on employment and business growth.