Gold: Bulls and bears jostle near two-week low, trade optimism, USD strength prevail
|- Gold traders struggle to justify sentiment concerning the US-China trade relations.
- Hong Kong unrest, doubts over phase two deal keep buyers on the floor while broad USD strength, phase one optimism turn them down.
- Comments from central bankers fail to provide any strong clues, few more, coupled with the US data, will be observed for further direction.
Gold traders keep guessing around $1,456 during the pre-European session on Tuesday. The complexity surrounding the US-China trade relations and doubts over Hong Kong politics, not to forget sluggish statements from the leading central banks' policymakers, seem to have played their roles off late.
Although a number of media releases have reported progress in the initial phase one deal between the United States and China, the uncertainty surrounding phase two remains on the cards. Also, contributing to the cautious mood are the Global Times (GT) headlines blaming the US for the unrest in Hong Kong and the future actions after pro-Democratic leaders won the local elections.
Further, policymakers from the Reserve Bank of Australia (RBA) and the US Federal Reserve (Fed) also crossed wires during the Asian session and failed to provide any clear direction for their future moves. While the RBA’s Deputy Governor Guy Debelle highlighted few negative points, including employment, the Fed’s Chairman Jerome Powell kept beating the drum of optimistic monetary policy at present.
Even so, shares in Asia have managed to remain mildly positive while the US 10-year treasury yields keep it around the previous day’s closing of 1.76%.
Following a not-so-busy morning, comments from the European Central Bank (ECB) policymakers will be the nearest event to direct safe-haven moves, while Governors of the RBA and the Fed will occupy the line afterward. Additionally, the US housing and manufacturing data could keep traders busy, while Consumer Confidence could offer strong direction to the greenback’s move. It shouldn’t be ignored that the US dollar is near to an eight-day high by the press time.
Technical Analysis
The 100-day Exponential Moving Average (EMA) around $1,465 acts as immediate resistance ahead of recent highs close to $1,479. Alternatively, June month top surrounding $1,439 will appear on the chart once the quote slips below the monthly low of $1,446.
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