Gold down as US and China Agree on a ‘Calm Attitude,’ Silver Extends Rally

XAU/USD advanced to break a short term resistance at 1,545 and to trade at highs since August 25 at 1,550. However, Feng remarks sent the metal down. The unit is now trading 0.24% negative in the day at 1,536.
Mauricio Carrillo
Gold down as US and China Agree on a 'Calm Attitude,' Silver Extends Rally
Gold down as US and China Agree on a ‘Calm Attitude,’ Silver Extends Rally

Calm attitude.

Hello FX Emperors! It is the latest trendy topic as China’s Ministry of Commerce spokesman Gao Feng said China wants to solve trade war with a “calm attitude.” It activated risk appetite, which sent gold down.

On the other hand, silver continues with its rally as investors are betting on the metal as an alternative of high gold prices.

China and the US maintain ‘effective’ communication

“We firmly reject an escalation of the trade war, and are willing to negotiate and collaborate in order to solve this problem with calm attitude,” Feng said Thursday, and for once, it seems to be true that both countries are willing to calm down the situation.

USD/CNY is performing its first negative day in the last eleven sessions as the pair is falling 0.20% on Thursday to its current 7.1493. However, the 7.1400 level looks like the new line in the sand for the China government.

If you believe in technical analysis, studies are now suggesting a possible correction, but technicals don’t matter here.

Feng also confirmed that the United States and China have effective communication. Coincidentally, US President Donald Trump used the “calm attitude” notion on his remarks about the Trade War earlier this week.

Gold lost all previous gains and trades down on Thursday

XAUUSD 1-hour chart Gold August 29

Gold is trading negative for the second day after investors welcomed Gao Feng commentaries on a “calm attitude” as a catalyst for risk appetite. Besides, the dollar index is trading positive for the second day.

Previously in the day, XAU/USD advanced to break a short term resistance at 1,545 and to trade at highs since August 25 at 1,550. However, Feng remarks sent the metal down. The unit is now trading 0.24% negative in the day at 1,536.

Feng words certainly motivated the movement, but it is also due to possible profit-taking ahead of the end of the month as Friday will be the last trading day of August.

Also, as FX Empire Analyst James Hyerczyk highlighted in a recent article, “with the market pricing in a 25-basis point by the Fed in September, and really only the yield curve inversion indicating a possible future recession, gold traders have no incentive to chase the market higher at current price levels, which leads me to believe the hedge funds may be taking a little off the top and booking profits.”

In the 1-hour chart, gold looks oversold with the MACD making a negative crossing. The unit is now testing the 1,533 support and consequently, the 1,530 area. Below there, the move could lead the cross to check the 1,525 level, which is the most significant support in the short term.

In the 1-day chart, technical studies are suggesting a possible correction in the XAU/USD with a test of the 1,500 area on the cards. The dynamic uptrend coming from November is acting as support at 1,504.

Below the 1,525 level, if you go short, then the XAU/USD would face support, or profit-taking, at the 1,510 area. Next, 1,500 and 1,490.

Silver extends gains to fresh highs since April 2017

XAGUSD 1-hour chart Silver August 29

Silver is trading positive for the fifth straight day as investors are betting on the XAG/USD as an alternative of high gold prices.

On the day, silver jumped to trade at highs since April 2017 at 18.65, but sentiment improvement sent the unit back down. It is currently trading 0.74% positive in the day at 18.50.

Technical studies are suggesting a short term correction that would drive the pair to the 18.40 area and then the 18.20 level.

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
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.