Gold Sees Safe Haven Gains As Stocks Fall Sharply and Deutsche Plummets
by GoldCore
ZeroHedge.com
Fri, 05/31/2019
Gold rose to a two week high and was higher in most currencies today after Washington’s threat of tariffs on Mexico exacerbated fears of a global trade war and recession, which saw a ‘flight to quality’ and gains for safe haven gold.
Spot gold jumped 0.9% to $1,298.80 an ounce this morning, its highest since May 15. Gold bullion has risen over 1.2% this month and appears headed for its first monthly gain in four months. This is important from a technical perspective and the fundamentals of growing risk aversion and robust demand should lead to further gains in June.
European trading has seen a clear flight to quality after President Trump unexpectedly politicised tariffs by slapping 5% on all goods coming from Mexico.
The increasingly hopeless case of a U.S. and China trade deal looked even further away after China drew up an “Unreliable entities” list of foreign parties (presumably mostly U.S.) that harm Chinese firms.
Stocks are red across the board globally with the S&P 500 breaking down sharply below its 200 day moving average (DMA). 2776 is a key level and Wall Street and Wasshington will not want a close below this level. Market intervention is quite possible, if not likely.
A weekly close below the 200 day moving average (DMA) could lead to follow through selling on Monday which could get ugly given the economic backdrop.
Financial stocks are particularly under pressure including UBS and embattled Deutsche Bank with the latter posting new “all time” lows of around €6. A whiff of contagion is in the air.
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