Gold bulls tiring on the 1500 handle as trade talk sentiment flips positive


  • Trade talks going well and risk on driving gold lower.
  • Bloomberg News had reported that the White House could put in place a currency pact and suspend tariff increases.

The price of Gold has been capped ahead of the key $1,520 target on a reverse in sentiment surrounding trade talks. Gold has dropped to a low of $1,491.77 and was down over 1% at one stage following optimistic trade talk headlines. Gold is currently trading at $1497.85, -0.91% at the time of writing. 

Gold futures also traded lower following news how trade talks have started off well, and in earnest, while Trump is also due to meet with  Chinese Vice Premier Lui He on Friday. “Big day of negotiations with China. They want to make a deal, but do I? I will meet with the Vice Premier tomorrow at The White House,” said Trump.

Prior to that, Bloomberg News had reported that the White House could put in place a currency pact and suspend tariff increases that are set to take effect Oct. 15. This followed mixed headlines in early Asia yesterday, leaving markets guessing as to whether high levels trade talks would take place or not.

Gold spiked on the possibility of the Chinese delegation cutting short negotiations, and rallied towards he said $1,520 target. However, prices were sent back and December gold on Comex lost some $14, or 0.9%, to $1,498.80 an ounce, after rising 0.6% on Wednesday.  December Silver was also on the back foot, losing 29 cents, or 1.7%, to reach $17.515 an ounce, following a gain of 0.6% the prior day.

Case for holding precious metals as a tail risk hedge for equities is still growing

"The case for holding precious metals as a tail risk hedge for equities is still growing, with ETF purchases soaring some 20% year-on-year and showing no sign of slowing down as of yet," analysts at TD Securities argued.  "At the same time, with a high proportion of real rates in negative territory, purchasing gold as an alternative to bonds is particularly attractive given the paradigm shift narrative."

Gold levels

Technically, bears can target a break to below a 50% mean reversion of the late June swing lows to recent highs around 1460/70. However, on the upside, bulls should the price remain in the vicinity of the 1500 level, then eyes can stay set on the 1520 level ahead of a 1535 resistance target. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD bounces after upbeat COVID-19 cure news

EUR/USD is trading above 1.13, rebounding from the lows. Gilead reported that its drug Remdesevir substantially reduces mortality among COVID-19 patients. The news boosted stocks and weighed on the dollar. US coronavirus statistics are due out.

EUR/USD News

GBP/USD recaptures 1.26 as the market mood improves

GBP/USD is trading above 1.26 as the market mood improves and the safe-haven dollar retreats. Investors are shrugging off Brexit concerns and focusing on hopes to cure coronavirus. US COVID-19 statistics are due out.

GBP/USD News

XAU/USD consolidates daily gains above $1,800

After advancing to its highest level since September of 2011 at $1,818 on Wednesday, the XAU/USD pair staged a correction and briefly dropped below $1,800 on Thursday.

Gold News

Cryptocurrencies: War for dominance hit the bedrock of the market

Bitcoin tried to regain market share and activated sales in the Altcoin segment. BTC/USD, ETH/USD and XRP/USD are looking for supports and a rebound to push them to new elative highs. The current compression on the XRP/USD chart could trigger an exploding movement.

Read more

WTI once again breaks $40 per barrel after trading lower in early EU trade

There has been quite the bounce in WTI since the EU session after some strong selling pressure during Thursday and overnight. Once again on Friday's session, the price has taken the USD 40 per barrel handle. 

Oil News

Forex MAJORS

Cryptocurrencies

Signatures