President Joseph Biden has issued a strong caution to Chinese President Xi Jinping not to back the Russian side in the current conflict in Ukraine. On Friday, the President spoke with Xi for two hours, attempting to persuade and warn the Chinese President that they should not be on the wrong side of history. So far, America has claimed that Russia has asked China for assistance in their conflict in Ukraine, while Beijing has disputed such claims.
Nonetheless, traders take solace in the fact that both presidents are working together to promote peace. Although it is important to note here, China disagrees with the US that Russia is solely to blame for the invasion of Ukraine. This specific aspect puts traders on edge and is likely to keep stock market volatility high.
The biggest worry for traders and investors is what would happen to the global economy if China starts supporting Russia. The US has placed the most stringent sanctions on Russia in order to punish it for its activities in Ukraine, and if the US threatens or takes similar moves against China, we will have a serious problem.
Gold
Gold's price has continued to fall after seeing its greatest drop since January last week. Traders are profiting because there is anticipation that a peace agreement will be reached between Ukraine and Russia. Second, the Fed's interest rate announcement dampened the gold price even further. The dollar index is robust and hanging on to its gains, and as long as this continues, the gold price is expected to fall further.