Gold spikes to all time high as US-China relations sour
The gold price rose to its highest price on record as investors focused on rising tensions between the United States and China. Media reports suggested that the two countries could be headed for a total breakdown of relations and outright conflict within the next few months. In a statement last week, Mike Pompeo called for an end of the “engagement” policy that has defined the two countries relations for decades. Analysts believe that these tensions will also hurt the trade that exists between the two countries.
The Australian dollar rose against the US dollar in the Asian session as traders reacted to the industrial profit data. According to the country’s statistics office, the country’s industrial profits rose by 11.50% in June as the country continued to reopen. The profits rose by 6% in the previous month. On a year on year basis, profit declined by 12.8% after falling by 19.3%. Later this week, the Aussie will react to the important inflation, export and import price index data.
The price of crude oil is little changed today as traders reacted to the rising production from the US. Oil companies have increased daily production by about 1.2 million barrels a day in the past 6 weeks. Output reached a low of 9.7 million barrels a day in the second week of June but has since jumped to 10.9 million. Analysts expect that production will stabilise at about 11 million barrels. In the economic calendar, we will receive the German business expectations data, Swedish PPI, and US durable goods orders.
The EUR/USD pair rose sharply during the Asian session. It is now trading at 1.1715, which is the highest it has been since 2018. The price is above the 50-day and 100-day exponential moving averages. Similarly, the RSI and Stochastic oscillator have moved to their highest levels in months, which indicates that the pair is overbought. Therefore, although the price is likely to continue rallying, a pullback is also possible.
The XAU/USD pair rose to an intraday high of 1942, which is its highest level on record. On the daily chart, the price is above all the short, medium, and long-term moving averages while the RSI and RVI have moved to their highest levels in days. The price is also below the dots of the Parabolic SAR. Therefore, the price is likely to continue rallying as bulls target the next psychological level in 1950.
The AUD/USD pair is trading at 0.7138. On the four-hour chart, the price is slightly above the 50-day and 100-day EMAs. It is also a few pips below last week’s high of 0.7182. The RSI has also started moving up again and is currently at 60. It is also above the ascending trend line that is shown in white. Therefore, the pair is likely to continue going upwards as traders target the next psychological level at 0.7200.