Gold eyes $1300 as Trump Slaps Tariffs on Mexican Imports

Gold bulls marched into Friday’s trading session with a mission to conquer $1300 amid news of unexpected tariffs on Mexican goods.
Lukman Otunuga

Open your FXTM account today

Appetite for the safe-haven metal is also receiving ample support from ongoing US-China trade tensions and concern over slowing economic growth. A vulnerable Dollar is poised to fuel the upside momentum with prices trading marginally below the $1300 psychological level as of writing.

Market speculation over the Fed cutting interest rates during the second half of 2019 coupled with geopolitical risks should ensure Gold remains buoyed moving forward. Technical traders will continue to closely observe if a weekly close above $1300 is achieved. A strong close above this level is likely to signal a move higher towards $1324.

Dollar blinks and loses hold on the throne

Dollar bulls were nowhere to be found today despite risk aversion accelerating the flight to safety.

Market fears over Trump’s trade disputes with Mexico and China negatively impacting the US economy are weighing on the US Dollar.  While the Greenback still remains a prime destination of safety in times of uncertainty, the question is for how long? When keeping in mind how the Fed funds futures are currently pointing to a near 70% chance of a rate cut by September, the Dollar’s upside may be limited. In regards to the technical picture, the Dollar Index has the potential to sink back towards 97.50 if a weekly close below 98.00 is achieved.

Pound slides on ongoing political uncertainty and Brexit drama 

It has overall been another painful trading week for the British Pound thanks to the persistent uncertainty over Brexit and rising fears around the United Kingdom crashing out of the European Union with no deal in place. The political risk circus in Westminster regarding who will take over from UK Prime Minister Theresa May and what this means to Brexit has worsened matters for the Pound with prices falling below $1.26 on Thursday for the first time since the ‘flash crash’ in early January.

Uncertainty is set to be the name of the game when it comes to the British Pound and Brexit as the clock slowly ticks, meaning Sterling weakness is poised to remain an ongoing theme as we head into the final trading month of Q2.
One matter that investors need to seriously bear in mind following confirmation on who the replacement of Theresa May will be, if whether the new Prime Minister of the United Kingdom will have enough time to flesh out a deal on Brexit.

This might appear as an unlikely scenario for today’s fast-moving environment around Westminster but should the United Kingdom be forced to ask for another extension to the current October 31 deadline, this could be rejected by the European Union and by all means encourage investors to price a no-deal Brexit into reality. The Pound can weaken by at least 5% if uncertainty over this potential scenario plays out.

Looking at the technicals, the GBPUSD is heavily bearish on the daily charts. The daily close below 1.2620 signals a decline towards 1.2500 as discussed earlier in the week.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.