This article was originally published on ETFTrends.com.
Gold miners and sector-related ETFs were leading the charge Monday as the sudden risk-off turn helped strengthen gold prices and the precious metal producers' outlook.
Meanwhile, Comex gold futures were 1.0% higher to $1,300.4 per ounce on Monday and were on pace for their best day in almost three months.
The U.S. and China failed to reach a trade deal last week, and the U.S. even increased tariffs on Chinese imports Friday. On Monday, the retaliatory response from China further fueled fears that an escalating trade war could drag down the global economy.
Given the heightened uncertainty, gold prices strengthened to a more than one-month high Monday as investors looked to a safe haven play, which further supported the gold miners category.
“We are seeing safe-heaven buying right now with the break down in trade talks and China talking about retaliating,” Phillip Streible, senior commodities strategist at RJO Futures, told Reuters. “Geo-political risks are rising, trade tensions escalating, the dollar is down and equities are really under pressure - all these factors are boosting gold prices right now.”
Further supporting the gold outlook, the U.S. dollar depreciated with the Dollar Index slightly lower to 97.29, making USD-denominated gold cheaper for foreign buyers.
“Gold had lagged early but the Chinese tariff announcement put more pressure on equity futures,” Tai Wong, head of base and precious metals derivatives trading at BMO, told CNBC. “So this is speculative buying based on lower stocks and lower yields with a technical break on the upside adding momentum.”
For more information on the precious metals market, visit our precious metals category.
POPULAR ARTICLES AND RESOURCES FROM ETFTRENDS.COM
- SPY ETF Quote
- VOO ETF Quote
- QQQ ETF Quote
- VTI ETF Quote
- JNUG ETF Quote
- Top 34 Gold ETFs
- Top 34 Oil ETFs
- Top 57 Financials ETFs
- New Bitcoin ETF Filed as BTC Price Eyes $8K
- Beyond Meat Up 5.25% Despite Sea of Red
- Crytocurrency Devotee Sees Bitcoin Tripling by 2021
- Universal Basic Income Would Be a Social and Economic Disaster
- McDonald’s Serves Up International Menu Items At Home