Gold Steady but Weak as Confusion Reigns in Markets Over Progress in Trade Negotiations
Gold prices are trading weaker after sliding lower in the previous session as promising news reports suggested that both the US and China are making sincere efforts towards reaching an interim trade deal. At the time of writing, GOLD is trading at a little above $1,464.
The safe haven appeal of gold was dented as news emerged that the US and China were heading towards another round of in-person meetings shortly. However, there were enough mixed signals in the markets to prevent the sentiment from shifting completely to risk-on, which kept gold’s slide in check.
The confusion in the markets is apparent from the slide in equities even as gold continues to weaken. Generally, these two share a negative correlation with each other – when the sentiment improves, investors shift from safe haven assets towards trading riskier instruments like stocks, and vice versa.
The Chinese Commerce Ministry confirmed that efforts are still on as both sides try to work out their differences with the aim of reaching a trade agreement and resolving the trade war that has impacted the global economy for more than a year. However, markets continued to trade tense after the US Senate passed two bills in support of the anti-government protests raging on in Hong Kong, threatening to disrupt the delicate relations with China in the process.
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