In addition to threats to withhold rare earth materials from the US, Chinese newspapers overnight have suggested that China has been pulled into actual wars in the past because foreign powers have withheld things needed by Chinese people! Clearly anxiety toward trade tensions have escalated especially with polls now anticipating a very dramatic escalation of the trade flap before any deal is achieved.
In fact the headlines overnight have started to use the term "weaponize" to describe China's potential withholding of rare earth materials and that clearly accentuates anxieties.
Yet another flight to quality catalyst for gold is the fact that US Treasury bonds are showing dramatic safe haven buying interest with prices overnight reaching up to the highest levels since early 2018. Strength in the gold market this morning is made even more impressive by the fact that the dollar has forged a fresh four day high and appears to be on track to return to the May highs and yet that hasn't discouraged gold buyers.
In other words classic safe haven sentiment is lifting gold and the impact of currency on prices has been relegated to a backseat.
In fact one could also suggest that equity market declines have become so significant and extended that anxiety is also being stoked from that sector. While gold initially discounted positive classical physical demand news over the prior five trading sessions those bullish developments might now add to the upward track.
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