Gold Advances as Tariff War, Remarks by Powell Revive Demand

Gold and Silver Casting at the Perth Mint

Photographer: Carla Gottgens/Bloomberg

Gold extended gains after Federal Reserve Chairman Jerome Powell said the U.S. economy faces “significant risks” from slowing global growth, bolstering expectations that the central bank will cut U.S. interest rates further. Copper swung between gains and losses.

Gold extended earlier gains that came after
announced plans to impose additional tariffs in retaliation for President Donald Trump’s latest planned levies. Trump
he would respond to the new China tariffs later Friday.

Trade-policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the U.S., Powell said in the text of remarks Friday in Jackson Hole, Wyoming. “We will act as appropriate to sustain the expansion,” he said.

“That’s a very accommodating statement,” Bob Haberkorn, senior market strategist at RJO Futures in Chicago, said by phone. “They’re going to keep this thing going for as long as they can.”

Traders of
fed funds futures
extended slightly the amount of easing they expect from the U.S. central bank this year after Powell’s remarks. The outlook for lower rates, along with China’s move on tariffs, may help revive investor demand for gold, which erased a weekly loss. Lower rates are a boon for the metal, which doesn’t pay interest.

Gold rebounds on China retaliatory tariffs, remarks from Fed's Powell

Gold futures for December delivery rose 1.2% to $1,527.10 an ounce at 10:47 a.m. on the Comex in New York, after falling as much as 0.4% earlier. December copper futures rose less than 0.1% to $2.5665 a pound after declining 0.9% following China’s tariff announcement.

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