Gold Caught in Range
Gold prices remain muted as we move through early European trading on Tuesday. A lift in risk sentiment this week has seen bullish momentum stalling in gold. However, with gold prices holding above last week’s lows, there is clearly residual safe-haven demand there reflecting the lingering uncertainty in the market. The US Dollar too has traded in a muted fashion this week, adding to the malaise in gold. As such, the current consolidation looks likely to continue near-term until we get a clear directional catalyst.
US/China Optimism
On the risk front, sentiment has been boosted this week by increasing optimism over US/China trade talks. Following on from a phone call between Trump and Xi last week, leaders from both countries met in London yesterday to begin two days of negotiations, with talks reportedly going well so far. There is also chatter that Trump is considering a compromise on US chip exports to China in exchange for increased access to rare earth materials. Traders are now once again sensing a better likelihood of a trade deal being agreed between the two sides. Looking ahead this week, any further positive headlines are likely to drive risk assets firmly higher, putting pressure on gold as safe-haven demand reduces further.
Technical Views
Gold
For now, gold prices are holding above the broken bear channel from YTD highs (bull flag break) and while above the 3,254.65 level too, focus is on a fresh push higher with 3,493.81 the next objective for bulls. To the downside, 3,164.82 is the next support to note if we push lower.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.