Gold Price Analysis: Mildly positive above $1,700 as US-China tension renews
|- Gold prices defy Friday’s downside.
- US President Donald Trump stirs up a tussle with China.
- The virus spreads in the White House, key personnel, not VP Pence, are self-isolating.
- Earthquake in Japan joins downbeat comments from Economy Minister.
Following the recent uptick, Gold prices take the bids near $1,710, up around 0.50% on a day, during the Asian session on Monday. The fresh fears of the US-China trade war are again helping the safe-haven while the coronavirus (COVID-19) updates offer a little clear direction.
Friday’s clues that the US and Chinese diplomats have agreed for communication and cooperation seems to have failed to impress US President Donald Trump as he recently fired shots against the dragon nation.
The Republican leader’s recent tweet renewed allegations on China concerning the virus outbreak after the initial comments that suggested the Republican leader is “having a very hard time with China” and that COVID-19 “sort of overrides so much”.
Read: China refutes 24 'lies' by U.S. politicians over coronavirus – Reuters
Other than the US-China tussle, the dragon nation is also aiming to punish Australia for its lobbying in support of China’s role in virus spread.
Elsewhere, some of the top White House members are self-isolating, not VP Mike Pence as earlier said by the Bloomberg reporter, which in turn favors the rush to risk-safety.
Even so, the US 10-year Treasury yields rise two basis points (bps) to 0.70%. Further, Japan’s NIKKEI seems to ignore a mild earthquake in Tokyo and downbeat comments from Economy Minister Yasutoshi Nishimura while printing 1.5% gains to 20,480.
Considering the lack of major data/events on the economic calendar, traders will keep following trade/virus updates for fresh impulse.
Technical analysis
A daily closing beyond 21-day SMA, currently near $1,708, could escalate the yellow metal’s recovery moves towards the monthly resistance line near $1,723. Meanwhile, an ascending trend line from April 21, at $1,677 now, limits the bullion’s immediate declines.
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