China Retaliates and Sends Gold up to Multi-year Highs

The trade war between the United States and China has now entered in a new phase as experts are now considering that China abandoned any hope for a trade deal with the U.S. Real concern about global growth has taken the market. Risk aversion is the theme of the day, sending gold up to highs.
Mauricio Carrillo
China Retaliates and Sends Gold up to Multi-year Highs
China Retaliates and Sends Gold up to Multi-year Highs

Gold and Silver are trading positive on Monday as investors are digesting news from China and its decision for new retaliation after the U.S. decision on more tariffs. Also, concerns on global growth are fueling risk aversion, lifting gold to highs since May 2013.

The cheapest yuan in a decade

China allowed yuan to fall to its lowest level in more than a decade as a retaliation measure following the U.S. President Trump to add more tariffs to Chinese goods.

China, historically, has been a country which likes to control its currency to fuel its exports around the world; however, the country was holding the yuan, so the USDCNY wasn’t able to trade above the 7.000 level since May 2013.

However, after the recent set of developments in the trade war, China stopped defending the fluctuation, and the USD/CNY broke above the 6.9740 on Monday, and it jumped to 7.045, its highest level in over six years.

The Dollar to Yuan is now trading at 7.033, 1.36% positive on Monday.

The trade war between the United States and China has now entered in a new phase as experts are now considering that China abandoned any hope for a trade deal with the U.S. Real concern about global growth has taken the market. Risk aversion is the theme of the day, sending gold up to highs.

Gold Up to highs since 2013

XAUUSD daily chart August 5

Gold opened the week with a positive tone as investors are buying the metal amid its condition of a safe haven. Traders don’t like the way the United States and China are managing the trade war.

On Monday, gold jumped to break above July 19 highs at 1,453, and to trade as high as 1,462, maximum since May 2013. Currently, XAU/USD is moving at 1,460, 1.35% positive on the day.

Technical conditions suggest more gains in the short and middle term for gold. In fact, “the market is currently being driven by upside momentum,” as FX Empire analyst James Hyerczyk said in a recent article.

“A sustained move over $1457.50 will indicate the presence of buyers. Holding above the previous top at $1467.00 will indicate the buying is getting stronger,” affirms Hyerczyk. “If his generates enough upside momentum then look for a rally into a pair of uptrending Gann angles at $1492.40 and $1494.50.”

To the downside, the bullish scenario is sustained by July 19 high around 1,453, but also by the 1,440 support. If broken, next levels to watch are 1,400 and 1,380.

Silver up, but contained by 16.60

XAGUSD daily chart August 5

Silver is also trading positive on Monday as the unit is enjoying the pro-metals environment in markets.

XAG/USD jumped on Monday to recover the 16.40 area and to test the 16.60 level earlier in the day. However, the unit wasn’t able to break above that area, and it is now trading at 16.43, 1.44% positive on the day.

Technical conditions suggest that the movement will be short-lived as the metal is not strong enough to sustain gains. However, time will have its say as risk aversion has taken the market.

Metals report for August 5, 2019

Copper, on the other hand, is trading down for the fifth straight day as the metal is extending the break below the 2.600 area it performed on Friday. Today, XCU/USD is 0.80% negative at 2.5460, testing 2019 lows at 2.5280.

Platinum is trading positive on Monday as the unit confirmed the 842.15 support and it traded back on Monday to test the 860.00 area.

Palladium opened the week with gains as the unit is extending its rebound from Friday’s lows at 1,380. It is currently trading at 1,440, 2.25% positive on the day.

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

IMPORTANT DISCLAIMERS
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.
RISK DISCLAIMER
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.
FOLLOW US