A major attraction for those looking to own gold since last summer is based on the spreading fear from the trade war between the U.S. and China. With the ongoing dispute on trade tariffs along with the possibility of a slower global economy, many eyes have turned towards the precious yellow metal should another financial market downturn happen.
However, there’s another reason to own gold that isn’t based on fear. There is more potential now than ever for global manufacturing to rebound. This rebound is making the possession of gold an attractive prospect.
Even though there are more signs of an economic slowdown in many countries for their manufacturing activity, there is also hope for a rebound sometime this year. The latest piece of hope is found in the progress made between the two countries for the trade war. Reports claim negotiators from both sides are working on memorandums for understanding critical issues on the tariff dispute. Meanwhile, both sides are looking at lists ten items long of goods and commodities China can purchase to reduce the trade surplus with the U.S. This step has dramatically lessened the distance between where we are now and an end the trade war.
Gold isn’t the Only Metal Affected by the Trade War
An economically sensitive commodity has already begun generating optimism that the trade war will soon draw to a close. That commodity is, surprisingly, the price of copper. Copper is known globally as a barometer of the world’s economic outlook. When the cost of copper rises during poor economic news, this implies that far-sighted buyers see something on the horizon, boding well for copper demand. For the past two months, “Dr. Copper” has rallied and even made a seven-month high. Only a few weeks before the trade-war started last July, copper prices collapsed, showing just how good an indicator copper is when it comes to economic situations.