The global commodities market awaits the outcome of the upcoming meeting between China and the United States. As a result of this anticipation, little has changed with the price of gold in the global commodities market. This follows a record eight-month high in the price of gold.
Many market observers have noted that the price of gold remains unchanged because investors and traders are anxious about the outcome of the upcoming trade talk between China and the United States. The market is also highly anticipating the decision regarding U.S. monetary policy.
On Wednesday, Federal Reserve Chairman Jerome Powell following the central bank's inaugural rate-setting meeting this year. The United States and Canada are expected to hold a couple of meetings wherein topics on finding a solution to the ongoing trade are expected to be thoroughly discussed.
In an email to Bloomberg, Think Markets U.K. Ltd. Chief Market Analyst Naeem Aslam wrote, "Mr. Powell would have to try hard to ward off any of his hawkish stance in the midst of the ongoing trade war between the US and China. In addition, we also have a great deal of pessimism about global growth."
Mr. Aslam added that should the market turn aggressive, investors and traders will most likely react to it and might drive the price of gold up.
Barely a month into 2019, the price of gold is up by 2 percent. This represents a fourth straight monthly gain. On the contrary, the price of the dollar is down for a third consecutive month. Many market analysts said that gold is regaining interest this year as investors start to be wary of the global economic slowdown. There are also some analysts who have said that the lack of U.S. rate hikes have also contributed to the downfall of the value of the dollar, while at the same time helped the price of the gold to rise.
China and the United States are expected to hold a crucial meeting this week. This is one of the first meetings agreed upon by the two superpowers following the decision to engage in a trade truce in order to sit down and negotiate a better deal to get out of the bitter trade war.
Tensions between the two countries have been exacerbated by charges levied against Chinese tech giant Huawei and its chief financial officer. According to some market experts, these charges will no doubt play a vital role in coming up with any major deal between China and the United States.
