Gold: Improving risk sentiment recalls sub-$1300 area

Concerns surrounding soft/delayed Brexit favored risk-on.
Politics at the US and the UK, coupled with doubts over the US-China trade deal, could still play their roles.

Anil Panchal FXStreet

Gold prices slid back to sub-$1300 region around early Monday. Optimism surrounding delayed Brexit largely played its role to propel the yellow metal during week-start, giving less leeway to doubts over the US-China trade deal. However, latest reports concerning the UK and New Zealand growth, coupled with political drama at the Britain and the US may be looked for fresh impulse.

With the last-week’s voting sessions on various Brexit issues giving rise to expectations of an orderly British exit from the EU, traders undermined risk-aversion. Adding to the profit-booking was the BBC’s report claiming the UK Finance Minister Philip Hammond said that significant numbers of Tory MPs are coming on board with PM May's plan.

The bullion refrained from respecting latest doubts on the US-China trade deal. China’s South China Morning Post described that the much awaited April meeting (which was initially expected in March) between the US President Donald Trump and China’s Xi Jinping may now take place in June.

It should also be noted that the British Chambers of Commerce (BCC) lowered its growth forecast for the 2019 UK GDP whereas New Zealand Institute of Economic Research (NZIER) did the same for New Zealand’s economy.

While Brexit optimism triggered initial profit-booking of the yellow metal, recently doubts concerning the US-China trade deal and global growth may help its recover the losses. Additionally, politics at the UK and the US are also actively watched as few of the British members of parliaments (MPs) want PM May’s resignation by April in exchange of supporting her Brexit deal on Tuesday whereas Donald Trump used his veto right to topple opposition motion question the US-Mexico border wall.

Gold: Technical Analysis

50-day simple moving average (SMA) at $1305 acts as immediate resistance ahead of highlighting $1311 and $1322 numbers to the north.

On the downside, $1294 and $1289 could entertain short-term sellers ahead of challenging them with 100-day SMA level of $1270.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

GBP/USD holds above 1.3350 with the 200-day SMA capping gains

The British Pound appreciates against the US Dollar on Tuesday to trim previous losses and return to the 1.3375 area, aiming to retest resistance at the key 200-day Simple Moving Average. This is a popular indicator, which lies a few pips below 1.3400 and has been capping Pound’s recovery over the last two weeks.

EUR/USD surrenders some gains, back to 1.1440

EUR/USD now gives away part of the earlier advance and recedes toward thre 1.1440 zone on Tuesday. The pair’s firm uptick comes in response to the marked sell-off in the US Dollar, which has intensified after US inflation figures disappointed expectations in June and investors has assessed Chair Warsh’s testimony.

Gold battles to recover the $4,100 mark

Gold reverses the recent weakness and reclaims the area beyond the key $4,000 mark per troy ounce on Tuesday. The precious metal’s recovery picks up pace and approaches the $4,100 region following the Greenback’s decline and comments from the Fed’s Warsh.

Crypto Today: Bitcoin, Ethereum, XRP extend sideways trading amid ETF outflows, US-Iran war escalation

Bitcoin hovers around $62,500 amid prevalent sideways trading. Meanwhile, major altcoins such as Ethereum and Ripple are holding above crucial support levels at $1,700 and $1.05, respectively, reflecting ongoing consolidation across the crypto sector.

Fed Chair Warsh reaffirms they will deliver price stability

While testifying on the Semiannual Monetary Policy Report before the US House Financial Services Committee, Fed Chairman Kevin Warsh reiterated that the Fed is making a commitment on price stability and the goal of 2% inflation.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June FOMC meeting landed mid-round-trip, describing a world that had already stopped existing.