Gold Falls From Highs
Following a record move higher over the last month, gold prices have stalled for now following a large reversal day on Friday. After printing fresh all-time highs, gold futures reversed sharply to end the day in the red with weakness carrying on through early trading so far today. Given the bearish divergence in momentum studies, risks of a correction lower are seen this week.
US/China Trade Optimism
On the macro front, a slight easing of tensions between the US and China looks to be the driver behind the pullback. Speaking in a TV interview, Trump said that his recent threat of fresh 100% tariffs on China wasn’t sustainable, fuelling speculation that his hardline rhetoric last week was merely a tactical ploy and not sincere. Traders are now hopeful that the Nov 10th trade deadline between the US and China will either see an extension of current tariff suspensions or a deal being agreed.
US/China Negotiations
These comments from Trump ahead of a scheduled meeting this week between US and Chinese officials have been met with optimism by markets. If talks progress well this week and we see further positive headlines, this could fuel a sharper sell off in gold prices near-term, raising hopes ahead of the Nov 10th deadline. However, if talks fail and tensions rise again, gold prices could easily breakout to new highs on afresh safe-haven demand.
Technical Views
Gold
The rally in gold has paused for now on a break above the 2% Fib extension level at 4,179.36. However, the level is holding for now as support and focus remains on further upside while that marker remains. Below there, the 4k mark will be the next support level to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.