- The positive news over US-China trade war and a strong US Dollar both keep gold under pressure on Monday.
- Gold is capped at the 1290.00 level in the American session.
Gold is trading at around $1288.55 a troy ounce on Monday.
In Asia, gold fell from the 1292.00 area to find an intraday floor at 1281.70 in early Europe. The metal then rebounded and is trading now in the 1288.00 area.
Both positive news on trade and a strong US Dollar keep gold on the back foot on Monday.
On Saturday, the US and China had constructive talks over the trade war dispute. Steven Mnuchin, US Treasury Secretary’s recent positive comments saw the markets enter in the risk-on mood on Monday. As gold is seen as a safe-haven asset, investors sold the metal in favor of more risky assets such as stocks.
Indeed, Mnuchin said: “we are putting the trade war on hold. Right now, we have agreed to put the tariffs on hold while we try to execute the framework,”
It has also been reported that China would import more agricultural commodities and energy from the US in order to narrow the $335 billion annual US goods and services trade deficit with China.
Both countries agreed that reaching a consensus was of mutual benefit for both parties. “China has never hoped for any tensions between China and the United States, in the trade or other areas,” said Chinese foreign ministry spokesman, Lu Kang while Vice Premier Liu He said the talks were “positive, pragmatic, constructive and productive”.
Goldman Sachs analysts argue that “we do not rule out the possibility that the Chinese team offered some tangible concessions which helped the progress of the talks, but as other aspects of an agreement are still in flux, has avoided stating these offers in public,” as the Bank wrote in a research note.
Meanwhile, the US Dollar Index (DXY) which is largely inversely correlated to gold has found an intraday floor at 93.66 and is still trading at multi-week high.
Gold 4-hour chart
-636625105428025463.png)
The main trend is bearish as the market is trading below its 50, 100 and 200-period simple moving averages on the 4-hour chart. Supports are seen at the 1281.70 swing low and at 1270.00 figure while resistances are seen at the1290.00 psychological level 1296.92 and at 1300.00 figure.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.