Washington began imposing 15% tariffs on a variety of Chinese goods on Sunday, including footwear, smart watches and flat-panel televisions, as Beijing began imposing new duties on U.S. crude.
Spot gold was 0.4% higher at $1,525.86 per ounce at 0336 GMT, having fallen to a one-week low at $1,517.11 in the previous session.
U.S. gold futures were also up 0.4% at $1,535.10 an ounce.
· “The reality of the trade war with the new tariffs being implemented over the weekend has kept a risk-off tone in markets this morning,” said ANZ analyst Daniel Hynes.
· U.S. President Donald Trump said both the sides would still meet for talks later this month.
· “There is still a very high level of scepticism. Traders want to see talks restart with both parties suggesting some positive outcomes before any optimism around the progress sets in,” Hynes added.
· Escalation in the trade war between the world’s biggest economies and heightened fears over a global downturn contributed to a rise of more than $100 for gold in August.
· A private business survey showed on Monday China’s factory activity unexpectedly expanded in August as production edged up, but orders remained weak and business confidence faltered amid Sino-U.S. trade woes.
· Meanwhile, the dollar index against a basket of six major currencies was down 0.1%, while global stock prices fell.
Spot gold still targets $1,497 per ounce, according to Reuters technical analyst Wang Tao.
· SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.23% to 878.31 tonnes on Friday.
· Hedge funds and money managers increased their bullish stance in COMEX gold and upped net long positions in silver contracts in the week to Aug. 27, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Meanwhile, 1,203 respondents took part in an online Main Street poll. A total of 762 voters, or 63%, called for gold to rise. Another 258, or 21%, predicted gold would fall. The remaining 183 voters, or 15%, saw a sideways market.
Charlie Nedoss, senior market analyst at LaSalle Futures Group, said that while he will take some gold profits off the table in the current market environment, he will still maintain a core position as he expects prices to continue to push higher.
He added that he remains extremely bullish on gold in the near-term as the market holds above its 10-day moving average. He explained that gold has held up very well as equities have managed to push higher this past week.
“Equities remain fairly resilient and could take some momentum away from gold but I don’t think you can ignore the future outlook,” he said. “Looking ahead, there is still a lot of uncertainty out there.”
1. Gold closed above the support, till this is held it can move to $1527.Once this is crossed it can rally till $1541. And if this is taken out it can climb back to $1554 and next $1571.
2. Short trades continue to remain off the table as bullishness prevails except scalp trades.
Bullish view – Bulls made a fresh 52 week high on account of fear led rally but failed to capitalize as bullish bets lost luster at higher levels owing to brisk rally and easing of U.S – China trade tensions but it became a cause of worry again in the weekend as it escalated to a new level. Uncertainties revolving around trade seems never ending which should continue to push the yellow metal higher along with the continuous signals of a wide spread global recession which already is the driving factor for the recent run in the prices. Taking into consideration the above factors $1800 seems fast approaching.
Bearish bets remain in the woods in the given scenario.
On larger terms, Gold continues to remain bullish and prices are expected to head higher.
· Among other precious metals, silver edged 0.1% higher to $18.36per ounce.
· Spot platinum rose 0.7% to $936.94 per ounce, while palladium was up 0.4% at $1,537.46.
· Trading could be subdued as U.S. financial markets are closed on Monday for the Labor Day holiday.
Reference: Reuters,Trading View,Kitco
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