Gold prices supported in risk-off markets around 20 D EMA
|- Gold tussles with the 20 D EMA.
- Safe Haven flows are supportive.
- Global growth and Sino-US trade spat funding risk-off flows.
Gold prices have been holding in positive territory on Wednesday with stocks in decline as global economic data continues to fall in under par while a protracted standoff between China and the U.S. amplifies global growth concerns looking forward.
The yellow metal has been under the demand of late as a safe haven and recent news that Chinese state media is reporting that the nation is prepared to use rare-earth minerals as an economic weapon has intensified investor´s anxiety. It is worth keeping an eye on yields as a barometer for risk appetite as well. The 10-year Treasury yield has continued to trade in the red as investors pile into bonds and out of risk as, sending the yield at its lowest since October 2017 to 2.2080%.
Chinese consumers may react by boycotting US products
Analysts at Danske Bank wrote this earlier today ...
China has never been a fan of negotiating while having a gun to their head, which is likely to result in a postponed deal. We do not see a deal being reached until H2 19, after a period of financial stress, as we probably need to see more pain on both sides before they are willing to resume the serious trade talks. China may believe it has time on its side because Trump is heading into an election campaign and is currently underestimating the pain that will be inflicted on the US economy by a full-blown trade war. If Trump carries out the tariffs on the rest of imports from China, Chinese consumers may react by boycotting US products.
Gold levels
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