GOLD: Shining Brightly Thanks To President Trump
Tariff man strikes again, Mexico first, and next potentially Australia. The flight to safety has been evident, no one knows who will be next and the precious metal has gained over 3% thanks to the president in the last 3 days alone!
If Trump keeps this up then the yellow commodity will be back at recent highs seen at $1350 in no time. Technically speaking, we have a clean break of our downward sloping trend line since late February changing the trend then the price just exploded straight into our next resistance level seen at 1315. Our ultimate price target would be the most recent highs seen in late February at 1347/1350 and a very strong resistance level for several years.
If Trump continues with new additional tariffs I feel we will be back at the recent highs in no time. Mexico is the latest victim with 5% import tariffs and threatens that this could rise to as high as 25% if Mexico does not stop citizens illegally migrating to the US and the flow of drugs into the United States.
There was speculation that the Trump administration was considering tariffs on Australian imports from last week but reports circulating earlier this morning that they are now not being considered and he was advised against this. Wise moves from his advisors.
Going forward no economy will feel safe at the moment if he is to continue on his tariff “spree” then look for further inflows into the safe haven commodity. However, if there is any sort of de-escalation then look for outflows of the commodity and into riskier assets.