Gold bulls taking back control on trade-war angst, eye $1,487

Spot gold is currently trading at $1,473.51 at the time of writing, slightly off -0.08% having moved within a $12 range between $1,466.02 and $1,478.88. Gold has been in a chop in Asia on Thursday as trade headlines take up the market's focus.

A series of news has been making for a jittery climate for which gold can be expected to be a top priority for portfolio managers as we approach the holiday season and less liquid markets; Indeed, gold can attract a safe-haven demand at times of volatility where investors will be looking for a place to invest their idle capital, especially should stock markets take a turn for the worst. 

Trade war headlines take up the focus

The discussions over ‘phase one’ of the US-China deal continue to drag on. "The latest report was that the rolling back of tariffs will be tied to the preliminary terms set when the trade talks failed in May," as analysts at ANZ Bank explained, noting that "the Chinese have reportedly demanded that all tariffs imposed after May be removed immediately and then tariffs imposed before that be lifted gradually...Regardless, the difficulty passing even the limited scope of ‘phase one’ highlights how tough getting a substantive ‘phase two’ agreement will be."

Overnight, a Reuters report highlighted how there are risks that a Phase One deal will not be passed prior 2020 which played havoc on risk sentiment and associated markets. Gold responded in kind and rallied, as did the Yen. US 2-year treasury yields continued to probe yesterday afternoon’s low at 1.56% and the 10-year yields were testing 1.73%. considering that the markets are only pricing only a 5% chance of easing at the December meeting and with the Federal Open Market Committee minutes underpinning a hold and wait and see approach from the Federal Reserve, gold can continue to enjoy subsequent demand. 

• White House Deputy Press Sec, Deere: “Negotiations are continuing and progress is being made on the text of the phase-one agreement” - Fox

• Trump expected to sign Hong Kong bill into law, various trade headlines weighs on risk sentiment

Gold levels

Bulls had breached the 61.8% Fibonacci retracement of yesterday's range which opens scope for a 100% recovery should the price break the confluence of the resistance line marked by the 14th and 18th Nov highs. A 161% extension meets the 200 4-hour moving average located at $1487.