- Concerns surrounding soft/delayed Brexit favored risk-on.
- Politics at the US and the UK, coupled with doubts over the US-China trade deal, could still play their roles.
Gold prices slid back to sub-$1300 region around early Monday. Optimism surrounding delayed Brexit largely played its role to propel the yellow metal during week-start, giving less leeway to doubts over the US-China trade deal. However, latest reports concerning the UK and New Zealand growth, coupled with political drama at the Britain and the US may be looked for fresh impulse.
With the last-week’s voting sessions on various Brexit issues giving rise to expectations of an orderly British exit from the EU, traders undermined risk-aversion. Adding to the profit-booking was the BBC’s report claiming the UK Finance Minister Philip Hammond said that significant numbers of Tory MPs are coming on board with PM May's plan.
The bullion refrained from respecting latest doubts on the US-China trade deal. China’s South China Morning Post described that the much awaited April meeting (which was initially expected in March) between the US President Donald Trump and China’s Xi Jinping may now take place in June.
It should also be noted that the British Chambers of Commerce (BCC) lowered its growth forecast for the 2019 UK GDP whereas New Zealand Institute of Economic Research (NZIER) did the same for New Zealand’s economy.
While Brexit optimism triggered initial profit-booking of the yellow metal, recently doubts concerning the US-China trade deal and global growth may help its recover the losses. Additionally, politics at the UK and the US are also actively watched as few of the British members of parliaments (MPs) want PM May’s resignation by April in exchange of supporting her Brexit deal on Tuesday whereas Donald Trump used his veto right to topple opposition motion question the US-Mexico border wall.
Gold: Technical Analysis
50-day simple moving average (SMA) at $1305 acts as immediate resistance ahead of highlighting $1311 and $1322 numbers to the north.
On the downside, $1294 and $1289 could entertain short-term sellers ahead of challenging them with 100-day SMA level of $1270.
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