Gold rises to fresh seven-week high as headlines from China heavy the risk tone
- Gold holds onto recovery gains as China’s Global Times magnifies the rift between the US and Beijing.
- Fears of hard Brexit and downbeat US data also contribute to the yellow metal’s safe-haven demand.
- An absence of major market drivers will focus on the trade/political headlines for direction.
Gold takes the bids to $1,489.12, after touching $1,490, while heading into the European open on Tuesday. The Bullion recently benefited from the worrisome headlines from China’s Global Times while down US data and risk of hard Brexit helped the prices earlier.
Be it denying the tariff relief as the victory of the US trade war or suggestions by Beijing’s top diplomat to the US to work with China, Global Times entertained market players in an otherwise inactive Asian session around the year-end holidays. The recently released news that conveys China’s strong dissatisfaction with the US over various issues could be considered boosting the risk aversion.
Amid the market’s rush for risk-safety, trade-positive news that the recent phase-one deal will help forex market balance seems largely ignored.
As a result, the US 10-year treasury yields weaken to 1.92% whereas S&P 500 Futures stay unchanged at 3,227 by the press time.
The yellow metal earlier took advantage of the downbeat US statistics and fears of a hard Brexit. Comments from the US President Donald Trump that the US-China are near to signing to phase-one and China’s tariff relief fail to please risk-takers on Monday.
Moving on, investors will now focus on the trade/political headlines, coupled with the US Richmond Fed Manufacturing Index for December, for fresh impulse. Forecasts suggest the second-tier activity gauge rise to 9 from -1 prior.
Technical Analysis
Unless providing a daily closing beyond $1,490, prices are less likely to continue rising, which in turn highlights the 21-Day Simple Moving Average (DMA), at $1,471 now, as immediate support.
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.
