Advertisement
Advertisement

Price of Gold Fundamental Daily Forecast – Flat as Trade Talk Hopes Halt Rally

By:
James Hyerczyk
Published: Aug 26, 2019, 12:01 UTC

At some point, financial market traders are going to want to hear a validation of Trump’s comments from the Chinese. Trump knows how to manipulate the markets in his favor by using Twitter and today’s price action may be just another example of that if China doesn’t confirm that trade talks are back on.

Comex Gold

Gold futures are eking out a small gain on Monday shortly before the regular session opening after plunging more than $25.00 from its early session high. The catalyst behind the selling is a positive comment about U.S.-China trade relations from President Trump.

Trump’s remark triggered a huge reversal to the upside in U.S. stock markets, while fueling a massive drop in demand for safe-haven assets like gold, the Japanese Yen and Treasurys.

At 11:45 GMT, December Comex gold futures are trading $1539.50, up $1.90 or +0.14%.

President Trump said on Monday that China is ready to come back to the negotiating table and the two countries will start talking very seriously. Speaking at the G-7 summit in Biarritz in France, Trump praised Chinese President Xi Jinping and welcomed his desire for a deal and for calm.

“China called last night our top trade people and said ‘let’s get back to the table’ so we will be getting back to the table and I think they want to do something. They have been hurt very badly but they understand this is the right thing to do and I have great respect for it. This is a very positive development for the world,” Trump said.

Trump’s comments somewhat offset Friday’s bullish events which fueled a reversal to the upside in gold prices. These events include new tariffs from China and President Trump’s ordering of U.S. companies to leave China and set up shop in the United States.

Daily Forecast

Trump’s comments are likely to set the tone in the gold market the rest of the session. Gold traders will feel pressure throughout the day if Treasury yields continue to rise and demand for risk increases.

However, at some point, financial market traders are going to want to hear a validation of Trump’s comments from the Chinese. Trump knows how to manipulate the markets in his favor by using Twitter and today’s price action may be just another example of that if China doesn’t confirm that trade talks are back on.

China’s Foreign Ministry spokesman Geng Shuang said he was not aware that a phone call between the two sides had taken place. When pressed on the details of the call, Trump said he didn’t want to elaborate and reiterated that the U.S. had multiple calls at the highest levels with the Chinese.

If China confirms the call then gold prices could continue to fall. If China doesn’t confirm, or if they deny the call then gold prices could accelerate to the upside.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?

Advertisement