GOLD PRICE NEWS – The gold price continues its ascent, hitting yet another new all-time high early Thursday morning. Gold prices traded above $1,315 per ounce on a weak U.S. dollar and worries over a budding trade war with China. The U.S. House of Representatives voted yesterday to let domestic companies petition for duties on Chinese imports in response to the weak yuan. The gold price has been a relentless uptrend over the past eight weeks, rising $156, or 13.4%.
Late yesterday, legislators, many of which have been increasingly vociferous in response to China’s reluctance to revalue its currency, passed a protectionist measure that is heightening worries over how a trade war would impact the global economy. With unemployment near 10%, politicians acted to defend their constituents against the continuous barrage of cheap Chinese imports. The U.S. dollar sank on the news, leading to the euro trading up through 1.36 against the greenback – giving more fuel to the rising gold price.
Morgan Stanley’s Steven Roach , on Bloomberg Radio, called the charges against China “ridiculous” and labeled the bill “bad economics” and bad politics.” A spokesperson at China’s Foreign Ministry stated that “we firmly oppose the U.S. Congress approving such bills.” A trade war with China has the potential to add a new negative geo-political element to the investment landscape and gold prices could have a new catalyst to drive the yellow metal even higher.
Silver prices have followed gold prices higher as the cheaper precious metal posts 30-year highs. Both gold and silver have rallied as investors seek to protect their savings from the ongoing devaluation of the U.S. dollar. Chairman Bernanke and the Federal Reserve are expected to announce a new, more aggressive quantitative easing initiative at the November Federal Open Market Committee meeting. Threats of new money-printing policies from the Fed have driven investors to gold and investments tied to the gold price, such as gold bullion exchange-traded funds and gold mining stocks.
