Gold: Supported by the risk tone

Gold remains one of the hottest for this year, with yet another day of turmoil in HK and mixed messaging flowing from the US/China trade progress.

It feels like we are close to a trade deal, yet, both sides are so firm in their positioning.

• The question is, if Gold can jump from $1,456 to $1,474 on a headline, where can it reach on a firm breakdown of the trade talks?

The mind boggles, but I would say $1,557 (high for this year) will be challenged. Let’s not make assumptions or get too far down the road before we check the rear view mirror, because the Brexit & HK issues are still clouding things at the same time as we seem so far yet so near a trade deal (finally) being inked between the US & China.

In the meantime, this week has the FOMC/Fed minutes, plus we saw significant moves in the US Treasury market overnight to suggest that Gold can trade like a rocket (both ways) on a meaningful “reset” in the USD, without even factoring in the ridiculously serious nature (for Risk-Off) of the HK protests.

My read on this, is expect the FOMC/Fed (Wednesday US Session//Early morning for Sydney Thursday) to be a mixed/balanced driver for the USD – so, we are back to focussing on every headline out of the trade camps.

I am convinced that a trade deal is looming, but after hearing from Donald Trump recently, it seems further away than in the past, based on his narrative.

Here’s my BIG point for ALL trades, for SP500, USD, Commodities – The PBOC said this week that they are ready to act if the global slowdown continues to crimp their growth.

• Meaning, in my view, a veiled threat that they can use a workaround in the USD/CNY fix rate if the trade talks break down.

So, what’s the trade? What does a; of this chatter equal?

The undertones are filled with negativity. Add in the “sensitive HK issue” and it should mean risk-off moves, JPY rebounds and Gold takes a run towards $1,500.

Remain a BUYER in GOLD $1,470.

Target $1,480 & $1,500 Target #2.