Weekly

Affected by US President Trump's tariff policy, the global financial market was shaken, and the gold market was no exception. Gold initially fell but then rose, reaching a new historical high, with funds flowing into the gold market for safekeeping. Continuing the pullback trend from the previous week, gold prices still faced downward pressure at the beginning of the week. In the early stage, it broke through the $3,000 mark and dropped to $2,956, falling by more than $200 from its recent peak. 

US President Trump has extended the 90-day exemption period for the 10% tariff by 30 days to gain more time and leverage for negotiations. However, as China has already retaliated, no concessions have been made. The news briefly eased market pressure. But the trade war between China and the US, involving the world's two largest economies, leaves little room for other countries to maneuver. The market remains extremely concerned about the risks. 

Subsequently, the EU retaliated through a vote, and with China's countermeasures, the tariff rate has been as high as a ban, and the market risk sentiment is very high. The US dollar and the US stock market have been hit hard. Funds have once again flooded into gold for hedging. After the gold price broke through $3,000, it quickly rose above $3,100, and the rebound trend was very sharp. 

The most perplexing aspect for the financial market is that the trade war might escalate into a financial war. If the United States raises tariffs, it could alter the world order. Many countries have begun to lose trust in the United States and sell off its bonds. Europe, Japan, and China have all started to divest from US Treasuries. The United States has long relied on its military and financial power to support its nation. When the dollar, US bonds, and the US stock market all decline simultaneously, it indicates that global hot money is flowing out of the United States. 

If multiple countries abandon the US dollar and dollar assets, the United States will find it difficult to maintain its hegemonic position, and the dollar standard will collapse. Only gold can serve as a reserve to support the issuance of domestic currencies. As a result, gold prices received a stronger boost during the week. Coupled with the fact that the CPI and PPI data for the week were unexpectedly poor, indicating less inflationary pressure, it was favorable for the Federal Reserve to have more room to cut interest rates. Gold prices broke through the 3,200 mark before the weekend and closed at the week's high. 

Looking ahead to this week, there are not many economic data releases. The more significant one is the retail sales data in the middle of the week. However, the more crucial factor is the possibility of a financial war breaking out. If multiple countries continue to sell off US Treasuries, the US dollar and the US stock market will surely suffer another heavy blow. There is a high chance that funds will flow into gold for safekeeping, leading to a sudden surge in its price. On the contrary, if Trump shows more goodwill, the gold market may take the opportunity to give back the excessive gains of the past two days. Let's keep an eye on the market situation and refer to each other's opinions.