The escalating trade tensions between the U.S. and China added fuel to gold's rally ... The fact that the People's Bank of China allowed the yuan to depreciate is a sign that China has thrown in the towel on any trade agreement with the U.S. coming anytime soon. As trade wars have just transformed into currency wars, investors turned toward safe havens. In a world of negative bond yields, gold looks relatively attractive.
Moreover, the renewed conflict with China increases the odds of more rate cutsfrom the Fed. Indeed, ... That would make for a decline in gold prices later on.
Fundamentally, though, the escalating trade war provides support to gold.
