Gold looks to regain $1300 post better China data

China positive sentiment renewed buying support for the bullion as the dragon nation is among the largest bullion buyer.
US data and risk events could help to provide fresh impulse through $1300.

Anil Panchal FXStreet

Gold is taking the bids around $1293.50 ahead of the European open on Monday. The yellow metal recently recovered from near $1287 level during Friday after positive news report favoring the US-China trade deal pleased the bullion buyers. The upbeat sentiment got stretched during early Monday as investors react to China’s welcome figures of purchasing managers’ index (PMI). Risk events and the US data will be in the spotlight going forward.

China is among the top gold buyers and any positive news for the dragon nation could well be reflected over the metal’s prices. With this, comments portraying constructive progress over the US-China trade negotiations by the US Treasury Secretary Steve Mnuchin were welcomed by the Gold buyers.

Recently, China’s PMI once again crossed 50.00 mark that differentiates between the contraction and an increase in the activity after a long time.

Be it NBS manufacturing PMI or its Caixin counterparts, needless to mention about the NBS non-manufacturing PMI, all of them touched multi-month highs and crossed 50.00 mark, signaling a recovery in the world’s largest industrial player.

Buyers seem happier with China news that they are giving less importance to the risk-on sentiment which should weigh on the Gold prices. The US 10-year treasury yield is currently trading up by nearly 2.5 basis points at 2.44%, signaling improvement in market risk-taking capacity.

While developments surrounding the US-China trade deal could direct near-term risk sentiment ahead of the Chinese delegates’ visit to the US, today’s retail sales and ISM manufacturing PMI from the US could also offer immediate trade direction to the yellow metal prices as they usually have an inverse relationship with the US Dollar (USD).

The US retail sales control group is likely to have grown by 0.4% from 1.1% previous expansion whereas ISM manufacturing PMI can impress greenback buyers with 54.5 figure against 54.2 earlier.

Gold Technical Analysis

The yellow metal’s U-turn from $1286 indicates brighter chances of its revisit to the $1300 round-figure ahead of challenging 50-day simple moving average (SMA) figure near $1308.

However, a downside break under $1286 might not refrain from dragging the bullion to 100-day SMA level of $1278.

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 breaches below 1.3500, two-day lows

GBP/USD faces renewed selling pressure, eroding the earlier advance and slipping back to the sub-1.3500 region on Wednesday. Cable’s loss of upside momentum follows the resurgence of the demand for the Greenback amid steady geopolitical tensions. Looking ahead, the British Pound is expected to remain under scrutiny in light of the release of UK GDP data on Thursday.

EUR/USD weakens to multi-day lows near 1.1520

EUR/USD makes a U-turn and trades with decent losses near 1.1520 following the closing bell on Wall Street on Wednesday. The US Dollar’s recovery post-US CPI data keeps the risk complex under pressure in a context where geopolitics takes centre stage once again. Moving forward, attention remains on US inflation with the release of Producer Prices alongside weekly Claims.

Gold edges lower to near $4,400 as Iran-US tensions counter support from tame US inflation

Gold price declines to around $4,400 during the early Asian session on Thursday, pressured by escalating geopolitical tensions between the United States and Iran. However, the potential downside for the precious metal might be limited as a tame reading of US inflation eased pressure on the US Federal Reserve to raise interest rates as soon as next month.

Bitcoin shows early signs of bottom despite lingering market stress

Bitcoin (BTC) is showing several signs of a potential market bottom as multiple indicators show improving market conditions, according to CryptoQuant analysts. CryptoQuant data revealed that Bitcoin has produced a second early bull signal, a pattern that has historically appeared closer to market bottoms.

Gold has priced a Fed pause. The hike is still coming

July inflation landed exactly where the consensus had it, on all four lines of the release, and Gold responded by adding around 1% and holding fast near $4,400/ounce, trading at its highest since early June. A print that surprises nobody is not supposed to move a metal that far.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.