Gold prices tumbled on Tuesday as reports suggested the UK and EU were closing in on a Brexit deal.

The threat of a disorderly Brexit has been one of the fundamental factors behind the surge in demand for gold this year. The desire for negative interest rates from global central bank’s being the other.

Officials from Britain and the EU will meet at a make-or-break summit on Thursday and Friday that will determine whether or not Britain is headed for a so-called no-deal Brexit. Ultimately a deal would remove the worst-case scenario for the global economy.

However, it wouldn’t be a panacea. The UK economy would still end up forfeiting more growth under the exit scenario proposed by Prime Minister Boris Johnson than under the Withdrawal Agreement drafted by his predecessor Theresa May.

Against that backdrop, the Bank of England will still need lower interest rates, something that would continue to keep golds bull-market firmly intact.

On Friday, President Donald Trump announced ‘phase one’ of a U.S-China trade deal, which saw gold prices fluctuate below $1,500.

China wants to hold another round of trade talks by the end of October to nail down further details before Chinese President Xi Jinping agrees to sign the trade deal outlined by U.S President Trump.

Looking ahead, Traders will be closing monitoring the outcome of the U.S-China trade deal, Brexit negotiations and the Federal Reserve's highly anticipated policy meeting later this month – for clues on Gold’s next big move.

Where are prices heading next? Watch Phil Carr at The Gold & Silver Club review Gold with the latest price forecast and predictions:

 

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