- China is reportedly pessimistic about a trade deal with US.
- 10-year US T-bond yield is erasing nearly 1% on Monday.
- Wall Street’s main indexes look to open modestly lower.
After falling to $1,456 during the European session, the XAU/USD pair gained traction in the last hour with the precious metal finding demand as a safe haven on resurfacing fears over the United States and China failing to reach a deal. As of writing, the pair was down only 0.06% on a daily basis at $1,466.20.
Trade headlines trigger flight to safety
Citing a government source, CNBC’s Beijing Bureau Chief, Eunice Yoon, on Monday said China was not optimistic about reaching a trade deal with the US and claimed that China would wait for the impeachment and the election in the US while focusing on supporting its own economy.
With the initial market reaction, the 10-year US Treasury bond yield fell sharply and was last down nearly 1% on the day. Furthermore, the S&P 500 Futures turned negative on the day to reflect the souring market sentiment.
The lack of significant macroeconomic data releases from the US will cause investors to stay focused on fresh developments surrounding the US-China trade dispute.
On the other hand, the US Dollar Index stays in the negative territory below the 98 mark on Monday, allowing the risk perception to continue to drive the pair’s action.
Technical levels to watch for
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