Stock Market: Tensions Escalate Ahead Of New FED Data, Gold Sees An Unexpected Rebound
BULLISH
KAU
GOLD
GOLD
GOLD
The stock market holds its breath before the FED decision. Ahead of time, the price of gold recovered this Monday. It posted a gain of 0.8% at $3,264 an ounce. After a weekly decline of 2.4%, investors are repositioning themselves in safe-haven assets. Details below!
In brief
- Gold is rising again as the stock market remains uncertain ahead of the FED decision.
- Geopolitical and monetary tensions strengthen the appeal of safe-haven assets on financial markets.
The stock market navigates between the FED, Trump, and geopolitical tensions
In the financial markets and the stock market, all eyes are on U.S. monetary policy. The FED is expected to keep its interest rates unchanged this week, despite repeated pressure from President Trump. According to him:
Last week’s surprisingly strong employment numbers did not justify a rate cut.
However, analysts wonder: does the growing economic uncertainty (fueled by trade tensions between the United States and China) justify a repositioning towards gold? Trump announced that he would not meet with his Chinese counterpart this week. At the same time, his speech suggested a reduction in tariffs might occur. An announcement that has increased volatility in stock indices!
Stock market under pressure: will gold become the king asset for investors again?
Since the beginning of the year, gold has gained nearly 25%. Its value even reached a high of $3,500 an ounce in April. This bullish movement is explained by:
- sustained demand (especially in China);
- massive purchases by central banks.
For many investors, this asset remains indeed a safe haven in a world losing its bearings.
With decreasing liquidity and low returns on traditional assets, analysts anticipate a possible massive return to gold (especially if the situation does not improve).
If the stock market continues to suffer the jolts of diplomacy and the hesitations of the FED, gold could continue to shine.
In a world dominated by political shocks and the fear of a global slowdown, the stock market remains tense and at the mercy of every statement. And if, beyond the rates, it were the investors’ confidence that became the true driver of the markets in this new global economic cycle? Food for thought!
