Search ForexCrunch
  • US$200 billion of Chinese imports into the United States set to be subject to new 25 per cent tariffs from Friday.
  • Chinese Vice-Premier Liu He still expected to be part of the delegation set to arrive in Washington on Thursday for talks.
  • Gold is currently trading at $1,284oz having travelled higher from a low of $1,278.31oz and $1,285.10oz.

Trump issued the threat to increase the tariffs in a tweet on Sunday, changes which were confirmed US trade representative Robert Lighthizer some 24 hours later, with the new rates set to become effective at 12.01am on Friday morning US time. This is weighing on risk sentiment and keeping market observers on their toes as they speculate about the President’s intentions and signals from the Middle Kingdom’s response.  

So far, there is an air of cautious optimism which is making for mixed trading conditions and volatility, whereby 4HR bearish channels have been extended in commodity-FX, such as AUD, NZD, CAD/USD and AUD/JPY. However, gold is yet to extend in neither of its directions and has been confined to a sideways channel as speculators scalp between 1285 and 1276 and keeping a close eye on the twitter feeds.

Gold vol falling to lows not seen in the last decade

“Gold vol falling to lows not seen in the last decade,” analysts at TD Securities noted, adding, “Unfortunately for trend followers, gold and silver remain without trend. While it is quite likely that continued uncertainty on the trade file could keep the Fed on perma-pause for longer, keeping a bid in gold, we also note that the CNY could also return as an important driver.”

Gold levels

The price is testing the 23.6% Fibo of the recent swing highs and lows between late Feb to May 2 business. A break there and a run above the 200 4HR MA that meets the 26th April previous highs with daily closes through 1289 will open prospects towards 1298 where it needs to get above to negate the bearish bias – A close above R2 at 1302.80 would be ideal. However, the price is in limbo at this juncture with no bias one way or the other. On the flipside, below 1266 support level, bears can target a confluence area where the 200-DMA meets that 50% Fibo down at 1253. A breakdown there opens the 61.8% Fibo target at 1231 which meets the mid-Dec lows/Oct resistance.