Gold positioning set to shift

Russell Sandiford Reiwa-Capital.com

We are seeing a shift in sentiment around the trade frictions which is tilted to the negative side of the coin.

Sadly, the headlines highlight how far we are from a Phase 1 trade deal being signed off and a scale back of trade tariffs.

China have maintained that they feel that the trade tariffs were part of the trade war, and as such, these should be removed as part of any trade deal. The US isn’t so agreeable and maintains these are key leverage within their negotiation process taking another twist.

Things are far from improving in the HK turmoil. In fact, the 5-straight days of financial district CBD chaos in HK city is a massive escalation compared to organised protests on a Sunday.

This issue coupled with the US looking to pass a bill regarding HK can spiral the trade war into extremely negative territory, as it inspired more conflict between China & the US - which will favour the following 2 main trades:

Key FX & Gold Trade:

Long Gold &
Long USD/CAD trades to play the risk sentiment.

Risk Sentiment & FX Trade:

When we add the Bank Of Canada outlook speech (set for tonight’s US Dealing Session) with the HK turmoil and trade frictions, this only means one-way USDCAD can go.

Higher.

Look for 1.3250 to be Bid towards 1.3330.

BUY
USD/CAD
1.3250
Target 1.3330

Author

Russell Sandiford

Reiwa-Capital.com

Russell Sandiford is one of the most reputable market analysts in Australia with over 16 years’ experience in the global FX, indices and commodities markets.

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