Why the US China Trade War is Ultimately Long-Term Bullish for Gold Prices
WHY THE US CHINA TRADE WAR IS ULTIMATELY LONG-TERM BULLISH FOR GOLD PRICES
The US China trade war is bullish for gold prices, though the relationship between the bullish nature of gold (and silver) prices over the last 15-months and the US China trade war is at first are not so readily apparent. If the US-China trade war has been bullish for gold prices, then why did it lead to lower gold prices initially?
The answer is quite simple. At the start of the trade war, as in any new fight in which the combatants are unsure of how the other party will approach the fight, neither participant wanted to act too hastily or recklessly, but rather desired to test the resolve of the other participant. Thus, as observers also were unsure of how each participant’s words and threats represented mere bluster and how much represented true resolve, the media’s reporting on this trade war also significantly affected gold and silver prices during the initial phases as they tried to determine which player was playing checkers and which one was playing chess. Consequently, the prices of gold and silver did not respond positively to the initial phase, or “feeling out” period, of the US China trade war, as a lot of misleading reporting happened in which the Western media saturated their initial reports with US President Donald Trump’s claims that the war would be won quickly and decisively.
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Author, maalamalama's blog
Sourced from, ZeroHedge, 2019.