Gold Tests 1,310 As Brexit And China Fuel Risk AversionUncertainty in the political sphere is leading commodity and safe-haven assets to 1-week highs across the market.
Gold is trading higher for the second day in a row as investors are buying safe-haven assets on concerns about Brexit and US-China trade talks. Silver trades above 15.50.
Brexit or no Brexit, that’s the question
In the United Kingdom, the Parliament rejected the Brexit plan presented by Prime Minister Theresa May again.
Brexit uncertainties reduced risk appetite as investors see the hard Brexit option as a real possibility.
The United Kingdom will exit the European Union on March 29, but the country is in the middle of a complicated political crisis.
However, the UK Parliament will vote again later in the day to back a no-deal Brexit. If members fail to approve it, they will vote again on Thursday about a new extension on the Brexit deadline.
In America, the US-China trade deal is also fueling risk aversion as while United States officials said that negotiations are close to being finished, both countries are entering a very critical phase.
Newmont and Barrick gold companies join forces
On the other hand, the new partnership between gold mining companies Newmont and Barrick Gold has ignited metals confidence in the long term.
The deal is expected to provide stabilization for mining and finally for the value of gold and other commodities.
This week, Barrick and Newmont agreed to a joint venture that would add half billion dollars in synergies, as reported by MarketWatch.
Both companies will work to consolidate operations in Nevada, US.
Gold extends gains above 1,300
Gold is trading positive for the second day as investors are betting on safer assets.
Following a break above the 1,300 area and the 50-day moving average around 1,303, XAU/USD is trading now around 1,310, 0.55% positive on the day.
Technically, gold has more room to advance as studies are suggesting more bullishness, at least in the short term. Also, XAU/USD is well supported by the 1,280 area.
If the pair maintain current levels, next resistances will be at 1,315 and 1,320.
On the downside, if the pair returns below the 50-day moving average at 1,303, the unit will get trapped by the 1,290-1,300 range again.
Silver breaks above 15.50
Silver broke the 15.50 resistance on Wednesday as the pair is joining risk aversion environment and it is mimicking gold performance.
XAG/USD is currently trading at 15.52, 0.56% positive on the day. Previously, Silver rallied to 15.55, its highest level since March 1st.
The pair is now facing a congested area between 15.50 and 15.60. If it breaks above it, next resistances will be at 15.80 and 16.00.
Palladium builds up a new bullish leg
Palladium has been trading sideways in the last two weeks following a rejection at 1,570. However, with the pair supporting the 1,500 level in the last few days, the unit seems ready to attack new highs.
XPD/USD is trading positive for the third day in a row. Aafter advancing 0.51% on Wednesday, it is trading at 1,545. Next resistance is the obvious 1,570 high.