The gold market jumped sharply higher overnight extending yesterday's surprise range up move and seemingly setting the stage for a retest of contract highs up at $1442.90.
While press coverage overnight indicated the reason behind the rally was expanded hopes of easier money ahead, it is also possible that signs of yet another trade dispute (this time the US versus Vietnam because of steel infractions) increases the uncertainty in the world economy which in turn enhances gold holdings.
Apparently the US commerce Department imposed duties of more than 400% on steel imports from Vietnam which means the US has ratcheted up trade tensions with both Europe and Vietnam this week.
Gold is also probably feeding higher off news that President Trump has selected two Fed nominees who are generally seen as doves.
Another lift for gold came from news that Indian June gold imports rose by 12.6% versus year ago levels and that news is accentuated further by Indian efforts to foster gold holdings in forms beyond physical. In fact the Times of India has touted holding gold on paper through gold bonds and or mutual funds that trade gold.
Limiting the gold market this morning are efforts in Russia to increase gold exports, a decline in SPDR gold holdings yesterday and the dollar action which remains near nine day highs.
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