Gold catches late NY bid on NAFTA headlines, but . . .

  • Spot gold ended the NY session on the bid but still well within the bear trend's parameters and below the 200-hr SMA located around the psychological $1,200 level.
  • However, the lower low was attractive to buyers on Tuesday, that was down at around $1,188 and the greenback was unconvincing on its break higher to 95.50, ending NY down at 95.11. 

Spot gold was recovering from the sharp sell-off from $1,207 down to the lows of $1,187 and made its way back into neutral territory while trade headlines and economic data continue to keep merry-go-round in service. Eares are on the ground for US and China developments but at the fore again was the NAFTA negotiations. While China/US tensions have seemed to support the dollar, with the US seeing as to have the upper hand, NAFTA progress should be CAD and commodities which would ultimately weigh on the greenback and potentially lift the price of gold - well, at least that is what we have seen in the late hours of US trade. 

NAFTA headlines - "...nothing is done until everything is done"

A late day comment from Pres. Trump boosted the precious metal and the Canadian dollar where he said "Trade talks going well. Canada wants to make a deal". However, it was only a matter of hours beforehand that  Freeland told reporters that, “Both sides did a lot of thinking over the weekend, so this was a very productive meeting. Having said all of that, nothing is done until everything is done"  - and that says it all really, but U.S. officials have said time is running out to agree on a text that can be signed by American, Canadian and Mexican leaders by Nov. 30, before the current Mexican government leaves office. Under U.S. trade negotiating laws, a text for that agreement is due by Oct. 1. Canadian officials had said previously that they are working on the assumption that they have until the end of September to make a deal. 

There are plenty of key data releases for the dollar, so bulls are not out of the woods yet and considering the recent PMI, nonfarm payrolls and wages beats, this week's CPI will be critical ahead of next week's Fed. The ball is on the bull's court at the moment and the trend is strongly in favour of the downside in the yellow metal until certain levels are broken back to the upside.  Meanwhile, markets are on the alert with respect to the U.S. imposing extra tariffs on an additional $200 billion of imports from China - should the speculation that Trump will add an additional $267 billion that he threatened on Friday, just hours before China reported another record trade surplus with the U.S, materialise, one might expect additional gains in the greenback as well. 

Gold levels

Gold is stuck to the 20 SMA, while the Momentum indicator heads higher with RSI an inch up from 45 on the daily sticks.  Howev4e, a correction of the correction opens the $1185-84 support area that guards a bearish breakdown to $1174 zone. If the price can continue to rally, $1,214 will be a key near-term objective. 

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