US trade deficit Support Stock over Gold

Gold Sketch

The US trade deficit rose to $40.3 billion in April from $37.1 billion recording an increase by 8.5%. This increase in the trade deficit was from Chinese imports after the holydays. It was forecasted that US imports would rise to $41.5 billion.

US exports increased by 1.2% to $187.4 billion while imports rose by 2.4% to $227.7 billion. The trade gap with China alone rose from $17.9 billion in March to $24.1 billion in April. Imports from electronics also soured along with drugs and auto parts. While the trade deficit related to petroleum fell for the 3rd consecutive month.

Investors interpreted these numbers as the US economy is performing better than the rest of the world. This perception was reflected on the US stock markets. The three major US markets indices, Dow Jones, Standard and Poor 500 and Nasdaq 100 rose with Dow Jones industrial Average index leading.

Gold price might benefit from this data, but not as much as the US stock markets.