Volatility in Gold
Gold prices are seeing better demand today with the futures market in the green across early European trading. However, it’s been a volatile week for the safe-haven asset with gold futures crashing almost 7% from recent record highs. The move lower comes amidst a better tone to risk appetite in response to recent comments from Trump this week. The US president was seen taking a softer tone on both China and the Fed, signalling that tariff amounts would soon come down on China while clarifying that he was looking to fire the Fed chief.
Shifting Sentiment
These comments from Trump reflect a meaningful U-Turn from the recent tone the president had taken on both China and the Fed. Indeed, rising uncertainty linked to Trump’s worrying rhetoric had seen markets crashing over the prior week leading gold to spike higher on surging safe-haven demand.
Near-Term Playbook
The shift in market sentiment this week signals a very clear playbook for traders near-term. If Trump maintains a calmer tone and we see further positive headlines, particularly the scaling back of China tariffs, risk sentiment should continue to rebound, leading gold prices lower as USD recover also. However, any fresh outbursts from Trump and a shift back to more hostile rhetoric, risk sentiment will contract leading to a fresh jump in gold prices on increased safe-haven demand.
Technical Views
Gold
The rally in gold has stalled for now ahead of the 3,500 level with price since reversing to retest the broken bull channel highs and 3,254.65 area support. With this zone holds, focus is on a fresh push higher. However, weakening momentum studies suggest risk of a deeper correction with 3,164.82 the next level to watch if we do push lower.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.