- Bulls slicing through moving averages and extend to a key resistance level.
- Trade war headlines spark a flight to safety and Gold picks up the safe-haven bid.
At the time of writing, spot gold is trading bid, breaking through the cluster of the 21/50 and 200-hour moving averages, (bullish), at $1475 and retaining a flat position on the day so far. Gold has travelled from a low of $1466.02 to a high of $1478.88 and is back en route to that high following the latest trade deal headlines which have sent risk-sentiment lower ahead of the Federal Open Market Committee meetings that are due at the turn of the hour.
The mood in the equity space has been soured again by news that a Phase One US-china trade deal may not be completed this year, a headline courtesy of Reuters. The S&P 500 is printing -0.83% at the time of writing and off by 25 points on the report. Gold has subsequently rallied off its lowest levels for the day by 0.62%, or $10.00.
Bullish markets for gold
Markets are on red alert and sensitive to trade headlines. Coupled with what appears to be a less dovish backdrop from central banks as well as the extra geopolitical theme associated with the bill on Hong Kong human rights whereby the US Senate on Tuesday unanimously passed the “Hong Kong Human Rights and Democracy Act”, overtly taken sides with HK rioters, risk sentiment is on thin ice – that’s bullish for gold.
Looking ahead, the Federal Open Market Committee minutes are due at the top of the hour, expected to confirm that the Federal Reserve is on hold – See FOMC Minutes Preview: Reinforcing the rate pause
The mood in US-Sino trade negotiations are helping gold prices firm yet gain, although the unscheduled meeting between the US President and the Fed Chair is likely providing additional importance to this piece of information in the mosaic that forms the market’s investment thesis,”
Analysts at TD Securities argued.
Gold levels
Bulls has breached the 61.8% Fibonacci retracement of today’s range which opens scope for a 100% recovery should the price break the confluence of the resistance line marked by the 14th and 18th Nov highs. A 161% extension meets the 200 4-hour moving average located at $1487.
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