US-China Trade Talks Back in Focus

Ongoing trade negotiations will continue to be a major theme this week, as US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin make their way to Beijing. Chinese Vice Premier Liu He will then travel to Washington next week, as both sides try to wrap up discussions.

Market hopes that a trade accord would be the be-all-end-all took a hit amid reports that the US-China trade deal may not see tariffs being lifted immediately. While that implies that US-China trade tensions will not worsen, the dampening effect that tariffs have already had on global trade could stick around for a while longer. The persistent presence of the tariff “wet blanket” could continue exerting pressure on trade-dependent economies, while weighing on the respective currencies.

Stock markets slip on growth fears

Global equity markets slipped on Wednesday as concerns lingered over a slowdown in global growth. Appetite for risk is likely to fade further amid the unfavorable global macroeconomic conditions. It is becoming clear that financial markets have become highly reactive to any news around world growth, and this sensitivity could result in increased volatility across stock markets.

Gold supported above $1300 level

It has been a negative trading week for Gold thus far, with prices trading around $1311 as of writing. Although a stabilizing Dollar during the early parts of the week dragged the metal lower, the medium to longer-term outlook favours bulls. With concerns over slowing global growth and geopolitical risks weighing on investor confidence and market sentiment, Gold will remain a destination of safety for investors. Another factor seen supporting the yellow metal in the longer term is a dovish Federal Reserve. In regards to the technical picture, bulls remain in control above the psychological $1300 with a breakout above $1313 opening a path towards $1324. Alternatively, a breakdown below $1300 will open the doors back towards $1280.

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