Gold seesaws as risk sentiment switches on and off

Reports from Brexit, US-China trade deal and North Korea have been the forces behind a shift in market mood.
While the UK lawmakers may try to soothe Brexit pessimism, souring politics at the US, North Korea and China can keep risk aversion active.

Anil Panchal FXStreet

Gold changes the hands around $1298 on early Friday. The yellow metal lost near 1.0% on Thursday due to risk-off sentiment but challenges to the UK, doubts over the US-China trade deal and statements from North Korea pleased buyers during initial Friday.

Bullion traders trimmed early-week gains on yesterday after news that the British parliament favored no-deal Brexit improved macro risk sentiment. The US Dollar (USD) and equity markets took advantage of the same.

However, the optimists were challenged during early Asian sessions today following the report that the UK Prime Minister Theresa May said to request the EU for three additional months for Brexit after the initial March 29 deadline was rejected by the UK members of parliament (MPs).

Additionally, doubts grew over the US-China trade deal after the US President Donald Trump’s meeting with his Chinese counterpart Xi Jinping was postponed till April than initially anticipated in March. Furthermore, risk aversion was also supported as the US lawmakers were cited criticizing China on human rights violations and North Korea was reported considering to suspend nuclear talks with the US.

Looking forward, Brexit developments and the US lawmaker’ comments on probable chances of the US-China trade deal could direct near-term risk sentiment and gold prices.

Gold Technical Analysis

Unless clearing $1292 to $1311 range, Gold prices are less likely to register further momentum either towards $1321 resistance or in a direction to $1288 and $1281 support levels.

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.

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