- 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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
AUD/USD consolidates gains above 0.6500 after Australian PPI data
AUD/USD is consolidating gains above 0.6500 in Asian trading on Friday. The pair capitalizes on an annual increase in Australian PPI data. Meanwhile, a softer US Dollar and improving market mood also underpin the Aussie ahead of the US PCE inflation data.
Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus
Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.
Stripe looks to bring back crypto payments as stablecoin market cap hits all-time high
Stripe announced on Thursday that it would add support for USDC stablecoin, as the stablecoin market exploded in March, according to reports by Cryptocompare.
US economy: Slower growth with stronger inflation
The US Dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.