Gold bleeds on trade optimism, drops 2.5% in GBP terms
- Investors are selling safe havens on the news of a tentative US-China trade deal.
- Gold is flashing red, having hit five-week highs in the overnight trade.
- The yellow metal is posting a bigger loss in GBP terms.
- Sterling is flying high on exit polls predicting Conservative victory.
Gold is losing altitude in Asia as investors are buying risk and selling safe havens on trade optimism.
The yellow metal, a classic safe-haven asset, is currently trading at $1,464 per Oz, having hit a five-week high of $1,487 in the overnight trade.
The pullback could be associated with the tweet by President Donald Trump that Washington was “very close” to a trade deal with Beijing. A report that US trade negotiators offered to cancel a new round of tariffs on Chinese goods further boosted the risk appetite.
Further, as per the latest reports, China has agreed to purchase $50 billion worth of US agricultural goods.
Gold takes a hit in GBP terms
Gold in GBP terms or XAU/GBP is currently trading at £1,087 per Oz, representing a 2.52 percent drop on the day. Also, the current price was last seen on June 20.
The Pound has surged on exit polls predicting a bigger than expected majority for Prime Minister Boris Johnson's Conservative party. A Conservative victory is seen paving the way for Brexit and is weighing over the safe-haven gold.
At press time, the GBP/USD pair is trading 1.3463, having hit a high of 1.3515 a few minutes ago. That was the highest level since May 2018.
The focus now shifts to the real results. According to Bloomberg, Labour has lost its stronghold Blyth Valley.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
