- US and China decide to restart trade talks.
- Improved market sentiment weighs on safe havens on Monday.
- Wall Street set to open the day with strong gains.
The XAU/USD pair started the new week with a wide bearish gap after the U.S. and China have decided to restart trade talks following the meeting between Chinese President Xi and the U.S. President Trump at the G20 summit. After dropping to its lowest level since June 20 at $1381.90, the pair staged a modest rebound and was last seen trading at $1391.70, erasing 1.25% on a daily basis.
Over the weekend, President Trump announced that they have decided to put tariffs on hold while they are engaging in a fresh round of trade talks with China. Although this was largely expected, major equity indexes in Asia posted large gains and now European stock indices are adding more than 1% on the day to reflect the upbeat market sentiment. Additionally, the S&P 500 Futures is up 1.1% on the day to suggest that Wall Street will start the day sharply higher.
The market’s risk perception is likely to continue to drive the pair’s price action in the second half of the day. Meanwhile, the IHS Markit and the ISM will both release the PMI reports for the manufacturing sector in the U.S. Ahead of these data, the US Dollar Index is up 0.28% on a daily basis at 96.40.
Technical levels to watch for
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