Gold: Off session highs, but remains bid amid risk-off
- Gold has backed off from the session high of $1,285 but remains in green.
- The renewed US-China trade tensions seem to have triggered a flight to safety.
- Gold traders need to closely follow the S&P 500 futures.
Gold has pulled back from the session high of $1,285 but is still flashing green amid risk aversion.
The yellow metal is currently trading at $1,282 per Oz, representing a 0.18% gain on the day, having defended key support at $1,266 last week, establishing a double bottom pattern on the 4-hour chart.
The metal is likely benefiting from the drop in riskier assets triggered by the renewed fears of US-China trade war.
The US President Trump said Sunday that tariffs on $200 billion worth of Chinese goods will be increased to 25% from the current 10%, as trade talks are progressing very slowly. In response, Beijing has reportedly called off the next round of trade talks scheduled for Wednesday.
These developments seem to have triggered a flight to safety. As of writing, the futures on the S&P 500 are down 53 points or 1.8%, while oil prices on both sides of the Atlantic are reporting a 2% slide. Asian equities are also a sea of red with the Shanghai Composite flashing a 3.5% drop.
Looking forward, the metal may revisit and possibly break above the Asian session high of $1,285, courtesy of increased haven demand from European desks. The breakout, however, may remain elusive if the markets regain some composure. Traders, therefore, need to keep an eye on the S&P 500 futures.
Technical Levels