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Gold Soars 1% to Three-Month High on Global Recession Fears

Summary:
Gold futures are soaring to their best levels in three months, driven by fears of a global recession in part to the US-China trade war. Investors are pouring into the safe-haven asset as global equity markets continue to plunge in the fallout of the White House’s announcement of tariffs on Mexican imports. The yellow metal also benefited from a weakening US dollar. July gold futures surged .90, or 1.14%, to ,326.00 per ounce at 16:42 GMT on Monday. The yellow metal has been on a tear in the last few trading sessions, advancing more than 3% last week and bringing gold prices into positive territory for the year. Silver, the sister commodity to gold, is also skyrocketing to kick off the trading week. July silver futures advanced %excerpt%.18, or 1.23%, to .745 an ounce. Although the white

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Gold futures are soaring to their best levels in three months, driven by fears of a global recession in part to the US-China trade war. Investors are pouring into the safe-haven asset as global equity markets continue to plunge in the fallout of the White House’s announcement of tariffs on Mexican imports. The yellow metal also benefited from a weakening US dollar.

July gold futures surged $14.90, or 1.14%, to $1,326.00 per ounce at 16:42 GMT on Monday. The yellow metal has been on a tear in the last few trading sessions, advancing more than 3% last week and bringing gold prices into positive territory for the year.

Silver, the sister commodity to gold, is also skyrocketing to kick off the trading week. July silver futures advanced $0.18, or 1.23%, to $14.745 an ounce. Although the white metal is down more than 5% on the year, it has quickly picked up steam over the last week, gaining 1.4%.

Precious metals are rallying on a tumbling US dollar as the greenback slipped 0.29% to 97.46. Despite the currency’s slide in the last month, the buck is still up 1.35% year-to-date. A weaker buck is good for commodities denominated in dollars because it makes it cheaper for foreign investors to purchase.

More important for the metals market, traders are concerned that the US-China trade war, as well as potential trade spats between the US and the European Union and Japan, could affect economic growth. Because the global economy has been slumping in recent months, investors think that a prolonged disruption in international trade could lead to a contraction.

All the major Wall Street firms and global agencies have already sounded the alarm about falling growth due to the trade disputes. The warnings of a pending slowdown were further heightened on US manufacturing growing at the slowest pace in nearly three years. The Institute for Supply Management (ISM)’s manufacturing index fell from 52.8% in April to 52.1% in May.

The announcement that the US will impose a 5% tariff on Mexican goods has also hurt global markets. Until the country stops the flow of illegal immigrants from Guatemala and El Salvador, the administration will increase the tariffs every month by 5%. Mexican Foreign Minister Marcelo Ebrard has said that the tariffs would devastate the economy, but he noted that these levies would not prevent Central American migrants from sneaking across the US-Mexico border.

In other metal commodities, July copper futures jumped $0.01, or 0.4%, to $2.65 per pound. July platinum futures spiked $26.80, or 3.37%, to $821.00 an ounce. July palladium futures plunged $20.30, or 1.52%, to $1,311.20 per ounce.

If you have any questions and comments on the commodities today, use the form below to reply.


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Andrew Moran
I am a full-time professional writer. Prior to my self-employment, I worked as a reporter for Digital Journal covering the politics beat and The Toronto Times reporting on the city’s entertainment scene. I currently write mostly about business, marketing and finance

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