Precious metals commodity-related exchange traded funds plunged Friday, with gold prices falling to their lowest level since last year, as traders switched to cash in response to the escalating trade tensions between the U.S. and China.
On Friday, the SPDR Gold Shares (NYSEArca: GLD) fell 1.9% and the iShares Silver Trust (NYSEArca: SLV) declined 3.9%. SLV also broke below both its short- and long-term trend lines at the 50- and 200-day simple moving average, respectively.
The broad selling follows news that President Donald Trump approved tariffs on $50 billion in Chinese goods, fueling concerns that the intensifying trade spate between Washington D.C. and Beijing will cripple the economy and slow global growth, the Wall Street Journal Reports.
China is the world’s largest consumer of many commodities, including precious metals.
“Tariffs on China could be a game changer for metals markets,” George Gero, managing director at RBC Capital Markets, told the WSJ.