- Rising US T-bond yields and stock indices weigh on safe-haven gold.
- US Dollar Index fluctuates in a very tight range above 98.
- US decides to delay its ban on Huawei for 90 days.
The troy ounce of the precious metal gained $15 last week and closed at $1,513 but failed to preserve its bullish momentum on Monday. With the market sentiment turning positive today, gold is having a hard time finding demand as a safe-haven. As of writing, the XAU/USD pair was down 0.8% on a daily basis at $1,501.50.
Eyes on US-China trade dispute
Earlier today, the Trump administration announced the decision to delay the ban on the Chinese telecom giant Huawei for 90 days to revive hopes of sides making forward progress in next round of face-to-face talks in September in Washington.
With the initial market reaction, the 10-year US Treasury bond, which fell to its lowest level since September 2016 last week, added as much as 5% on the daily chart and Wall Street's main indexes opened the day sharply higher led by strong gains in technology shares.
On the other hand, the lack of significant macroeconomic data releases on Monday allowed currencies to remain quiet and helped the pair limit its losses for the time being. After closing the previous week with a gain of more than 1%, the US Dollar Index is staying virtually flat on the day near the 98.20 handle.
Commenting on the impact of the US-China trade conflict on the Greenback, "If the Fed sees more certainty on the trade front, and higher valuations for shares, the pressure to loosen monetary policy would wane," said FXStreet analyst Yohay Elam. "In turn, it would likely refrain from cutting interest rates in September and perhaps signal tighter monetary policy going forward. On this background, the greenback has room to rise – whether Trump is thrilled or not."
Technical levels to watch for
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
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The 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.