Gold tops 10-week high amid risk aversion wave, greenback weakness
|- Trade tensions and upbeat data from China propel the bullion’s latest rise.
- Rising speculations of the Fed rate cut offer additional strength to Gold.
With the recent political events pushing traders towards risk safety, Gold prices are on the bids near a 10-week high of $1312.60 during early Monday.
While the US-China and the US-Mexico trade tensions have recently been on the dashboard, latest upbeat numbers from China’s Caixin manufacturing PMI and expectations of an interest rate cut from the US Federal Reserve have offered fuel to the bullion’s current upside.
China’s May month manufacturing gauge crossed downbeat forecast to flash three-month high whereas Barclays recently anticipated two rate cuts from the US Fed during the present year. Also, Goldman Sachs has again cut its Q2 GDP forecast for the US economy to 1.1%.
The US 10-year treasury yield, often followed to gauge global risk sentiment, lost more than two basis points (bps) to 2.121%, the fresh lows since September 2017.
Upbeat data from the world’s second-largest gold consumer and its tough stand against the US continues to favor the yellow metal amid broad greenback weakness.
Positive news/reports concerning the US President’s refrain from levying tariffs on Australia and the Mexican President’s readiness to abide by the US demand over migration had little impact to dim risk aversion.
During the rest of the day, manufacturing PMI from the UK, the US and Canada might entertain momentum traders while political news/developments could keep directing near-term moves.
Technical Analysis
Prices need to sustain its break of $1311 comprising April high in order to aim for $1323 and March month top around $1328, if not then $1302, 100-day simple moving average (SMA) level of $1296 and $1288/87 may come back on the chart.
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