Gold Market Awaiting Fresh Move
Gold prices are looking a little softer through early European trading on Monday as traders look ahead with cautious optimism to the upcoming Ukraine peace talks in Saudi Arabia this week. Ukrainian and US delegations will meet this week for bi-lateral talks aimed at bringing a peace deal between Russia and Ukraine closer. The talks follow similar meetings between US and Russian officials in Saudi Arabia last month.
Peace Talks
While a peace deal is still a long way off, all incoming developments will be closely monitored and are expected to move markets. If talks go well this week and positive headlines emerge suggesting that Ukraine is prepared to compromise on territory, risk appetite should improve, leading gold prices lower on reduced safe-haven demand. Equally, if talks falter and Ukraine refuses to compromise on territory, the near-term prospects of a peace deal will weaken, leading gold prices higher as safe-haven flows increase.
Trade War & USD
Away from the peace talks, traders will also be keeping an eye on trade war developments and USD flows this week. Chinese countermeasures against the US went live this week and US tariffs on aluminium and steel imports will go live mid-week also. With trade tensions intensifying, downside economic risks are growing, which should ultimately benefit gold particularly if we start to see USD selling off again. Traders will also be watching the latest US CPI readings on Wednesday. If inflation cools as (or more than) expected, USD is likely to tumble as near-term Fed easing expectations increase, again helping lift gold prices. On other hand, if CPI tops forecasts this week, creating pushback against near-term easing calls, gold should fall as USD rallies.
Technical Views
Gold
For now, gold prices remain within the range of the last four days as the market continues to consolidate below the all-time highs. With a lower high still in place, downside risks remain and 2,859.15 will be the level to watch with a break there opening the way for a test of deeper support at 2,789.40. While support holds, however, focus is on a break higher and a continuation of the bull trend.
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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.