- Gold prices struggle to justify the pullback from $1,879.24.
- The US-China tussle gets heated as US President Trump frets about the trade deal.
- Increasing odds of a delay in the US stimulus, downbeat US data adds strength to safe-haven demand.
- Early-month Preliminary PMIs will decorate the calendar, risk catalysts to keep the driver’s seat.
Gold buyers catch a breather around $1,887 during the initial Asian morning on Friday. In doing so, the bullion traders probe the previous five-day winning streak to the highest since late-2011. Underlying the precious metal’s strength is the rush for risk-safety with the Sino-American tension re-occupying the headlines off-late.
Is US President Trump suggesting no trade deal with China?
During his daily press briefing, US President Donald Trump said that China trade deal “means less to me now than it did”. The comments came after China’s threats to oust American diplomats following the Trump administrations to empty the Chinese Consulate office in Houston. Also increasing the fears of a full-fledged tussle between the world’s top two economies are the fiery statements from US Secretary of State Mike Pompeo and headlines via China’s Global Times (GT).
Other than the pessimism surrounding the Sino-American tussle, updates that the much-awaited US phase 4 fiscal package will be delayed also weigh on the market sentiment. The Financial Times (FT) cite the Senate Leader Mitch McConnel to inflate the odds of no aid package by the end of July, as previously suggested by US Treasury Secretary Steve Mnuchin.
Elsewhere, the coronavirus (COVID-19) also continues to hammer the risk-tone sentiment. The latest news suggests the US new cases cross 4.0 million mark with a shortage of beds in Florida and surging figures in Texas. Further, Victoria and Tokyo are also causing worries for the Australian and Japanese governments respectively whereas India and Brazil keep fighting with fewer resources and a faster rate of virus spread.
As a result, Wall Street benchmarks flashed the first negative closings in five days on Thursday while the US 10-year Treasury yields slip below 0.60%. Additionally, the record low of the US 10-year yields on Treasury-Inflation Protected Securities (TIPS), to -0.907% also portray the risk-off mood.
Looking forward, traders will keenly observe the preliminary readings of July month activity data from Australia, Europe, the UK and the US for fresh impulse. Also keeping the watch-list will be the risk catalysts like virus updates, US-China stories and fiscal budget news.
Technical analysis
Unless slipping back below $1,800 mark, the sellers are less likely to enter any trades. On the contrary, $1,900 and the record high of $1,921.07 continue to lure the bulls.
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
EUR/USD retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.