Gold: Bulls and bears jostle around $1331 as trade headlines grab the spotlight
- Political plays surrounding trade entertain global traders amid lack of top-tier data.
- Latest positives from the IMF seem to have directed the risk sentiment.
Although initially negative headlines from the US-Mexico talks propelled the risk-safety during early Thursday, trade positive comments later on restored investor confidence and dragged the Gold prices down towards $1331 amid initial Asian session.
The bullion rose after the news broke that the White House talks between the US and Mexican leaders failed to offer any solution to avoid fresh tariffs on Mexico’s products reaching the US. However, it was later tweeted by the US President Donald Trump that the talks will resume tomorrow and only if it fails, the trade neighbor will witness 5% tariffs that can go up to 15% by October.
It should also be noted that another report from the CNN conveyed that the US intelligence knew that China helps Saudi Arabia build missiles. With this, the US may turn harsher over the dragon nation during their confrontation at this month’s G20 meet of global leaders.
On the top of that, International Monetary Fund’s (IMF) Managing Director Christine Lagarde said that while she will be pushing global leaders to not harm the latest recovery with tariff war during upcoming G20, she doesn’t see the threat of global recession.
Adding to the upbeat sentiment could also be the Japanese press report conveying brighter chances of a trade discussion between the US Treasury Secretary Mnuchin and Japan finance minister Taro Aso at the sidelines of G20.
Global risk barometer, the US 10-year treasury yield, is in green by nearly one basis point to 2.13% during the press time.
With little data on hand, investors may keep following global political plays in order to determine near-term trade direction.
Technical Analysis
A successful break of current year tops surrounding $1347 becomes pre-requisite for the yellow metal to aim for $1356/57 region comprising April 2018 highs, failure to do so seems to favor sellers targeting return of $1328 and $1311.