Gold continues its steady march north amid weak USD and the ongoing Sino-American trade conflict
On Tuesday, XAUUSD staged a solid rebound and pierced the $2,000 mark amid reviving demand for safe-havens and cautious sentiment that reigns market.
The US Dollar extended its decline to the mid-95.00 region and continued to navigate the red zone as Democrats and Republicans still can’t agree on the new stimulus package. And though both parties wish to resume stalled talks, they are still at odds over the essential points of the agreement.
However, a more important headline that supported gold’s rally was another round of escalation in the US/China tensions. The US State Secretary Mike Pompeo announced new sanctions against Huawei – the other 38 affiliates to Chinese tech giant were added to the blacklist. Moreover, Trump’s administration introduces fresh restrictions that prevent foreign companies from selling chips that work on the US software to Huawei without first getting a license to do it. This move dented the ongoing optimism and supported the non-yielding metal.
Meanwhile, the US Treasuries as well we global equities keep on losing ground while new coronavirus cases are registered all around the world with Germany, Australia, and New Zealand become new hotspots. This also contributes to risk aversion on markets and helps gold to go up.
Today we won’t see any important releases from the US and the calendar seems rather empty so investors will focus their attention on US/China relations and coronavirus headlines. On Wednesday FOMC will publish its minutes that may hint on further Fed’s actions and thus may influence the USD dynamics.
From the technical point of view, XAUUSD sits comfortably just above the $2,000 level. Further north the resistance is at 2008, 2029, and $2049 while the support lies at $1953, $1930, $1907.
