Home Forex News Gold prices (XAU/USD) Receive Support From Growing US/China Tension Consolidating Around $1,700...

Gold prices (XAU/USD) Receive Support From Growing US/China Tension Consolidating Around $1,700 Up 0.90%

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  • Gold prices trading around $1,700 levels
  • US/China tensions could lead to a pullback
  • Additional US monetary stimulus could offer support to the prices

Gold prices (XAU/USD) are unchanged with the dollar strengthening but the growing tensions between the US and China over COVID-19 have kept the yellow metal around the $1,700 level.

US threats of imposing tariffs could offer support for gold

On Monday spot gold was trading at $1,698.56/oz after it had gained 1% at the end of last week as President Trump threatened that he will end the trade agreement should China fail to buy US products. On the other hand, the US gold future was up 0.5% at $1,708.80 per gold ounce.

Tension brewing between the US and China after State Secretary, Mike Pompeo, indicated that COVID-19 came from a lab in China. Such sentiment might ignite the trade war which will be good news for bullion.

Gold analysis

In the last few months, gold prices have been supported by widespread monetary and fiscal stimulus. There are signs that the US will introduce additional stimulus and the muted survey from the Bureau of Statistics of Australia could act as a catalyst for gold prices.

Interestingly the pullback on prices could accelerate this month as the Bank of England and Bank Of Australia plan to maintain low-interest rates and also a conservative monetary policy approach could stifle the appeal for gold as governments plan to lift lockdowns.

According to UBS Investment Bank Analysts, Joni Teves, there is a possibility for gold prices to break the $1,800/ounce barrier. For now, the investment bank is holding a near-term price target of $1,790 per ounce.

At the time of writing gold was 0.90% up at $1716.25 with the range for the day is between $1700.50 and $1725.30. In the past week, gold dropped 0.50% having established highs of $1,737.00 and lows of $1,676.00. In the past month, gold prices gained 4.25% to highs of $1,788.80 and lows of $1,638.20 whereas in the past year it has gained 34.10% with highs of 1,788.80 and lows of $1,273.60.

Time                            : 04-05-2020

Pivot                           : $1697.80

Technical View           : Short below $1701.68

Target                         : $1704.03, next 2 targets $1707.39 and $1713.74

Comments                  : Weak Bullish

Last Price                    : $1716.25

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