From Naeem Aslam:
Gold has been out of luck for the majority of the year so far. The year to date (YTD) performance of the precious metal sits at -0.46 percent. This is despite the fact that the Federal Reserve has adopted a dovish stance towards their monetary policy and there are serious concerns over the ongoing Trade War between the United States and China. In fact, the mainstream Chinese media has adopted a very aggressive tone against the U.S. with the Chinese media sending a clear warning that the dispute is going to hurt U.S. companies the most because of their exposure in China. According to the “Treaty damage to the U.S. hinterland” a 25% tariff increase on Chinese companies is going to impact 1 million U.S. jobs and will also anchor the financial market turmoil further.
The relation of the Dollar Index to the gold price is always interesting, one goes up and the other goes down, mostly. The chart below shows that the gold price has lost value due to the strength in the Dollar Index and this trend is still robust.
The question which comes to mind is: why is the Dollar Index still strong if the Fed isn’t going to change its monetary policy?
The SPDR Gold Shares (GLD) was trading at $120.33 per share on Wednesday afternoon, down $0.03 (-0.02%). Year-to-date, GLD has declined -2.68%, versus a 7.40% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Forbes.