Gold: Mildly positive around $1556 despite trade/political optimism
- Gold prices ignore the US diplomat’s optimism concerning the latest trade deals with China, Canada and Mexico.
- China’s Vice Premier praises Washington for dumping it off the currency manipulator list.
- The US dollar weakness could be cited as reasons.
Gold prices extend the recent recovery from $1,555 while taking rounds to $1,556.80 during the Asian session on Thursday. The precious metal seems to concentrate more on the US dollar (USD) weakness than trade/political headlines that have been positive off-late.
Following the successful phase-one deal signing in ceremony, China’s Vice Premier Liu He recently crossed wires while saying that it was the correct choice for the US to remove China from the currency manipulator list.
On the other hand, the US Treasury Secretary Mnuchin also appeared in media, via Fox, as conveying the optimism from the latest US trade relations with China, Canada and Mexico. The Trump administration member said, “The United States–Mexico–Canada Agreement (USMCA) and the US-China trade deal will add 50 to 70 basis points to US GDP.”
Even so, the US 10-year treasury yields and S&P 500 Futures seem to be a little happy with the news, which in turn pushes traders towards gold, the traditional safe-haven. Also contributing to the yellow metal’s mild strength could be the USD weakness. Further, the US House Speaker Nancy Pelosi and certain other politicians presented the papers to push for President Donald Trump’s impeachment to the Senate.
Investors will now take a serious note of the trade/political headlines for the immediate direction ahead of the US session that is likely to offer more clarity to the greenback traders. The reason is the presence of the December month Retail Sales data for publication.
While 10-day SMA, near $1,557, acts as an immediate upside barrier holding the key to the metal’s run-up beyond $1,570, September month high near $1,535 and 21-day SMA close to $1,528 restrict short-term downside.