On Thursday the worst performing area of the local share market was the gold industry.
Although the U.S. Federal Reserve cut rates by 25 basis points, it warned that future rate cuts were not guaranteed and referred to the cut as a "midcycle adjustment to policy".
The chairman of the Federal Reserve, Jerome Powell, explained: "When you think about rate-cutting cycles, they go on for a long time and the committee's not seeing that. Not seeing us in that place. You would do that if you saw real economic weakness and you thought that the federal funds rate needed to be cut a lot. That's not what we're seeing."
This sent the price of the precious metal to a two-week low and led to investors panic selling the gold miners.
Amongst the worst performers were the Newcrest Mining Limited (ASX: NCM) share price which tumbled 3.9% lower, the Northern Star Resources Ltd (ASX: NST) share price which plunged 7.2% lower, the Resolute Mining Limited (ASX: RSG) share price which sank 5.4%, and the St Barbara Ltd (ASX: SBM) share price which dropped 4.6%.
But what a difference a day makes.
This morning the likes of Newcrest and Northern Star look set to rebound strongly after the gold price jumped over 1.3% to US$1,457.50 an ounce.
According to CNBC, the gold price rose strongly after U.S. President Donald Trump announced that he plans to impose additional tariffs on Chinese imports.
This sparked fears of escalating trade tensions between the two nations, dragging the U.S. dollar down from its two-year high and sending bond yields lower.
President Trump intends to impose an additional 10% tariff on US$300 billion worth of Chinese imports from September 1. This is despite talks aimed at easing tensions between the nations continuing.
