Gold prices pick up on concerns about US-China tensions.
Trump threat to China dampens hopes of a quick economic recovery.
XAU/USD has bounced up from two-week lows sub $1700 on Wednesday and is turning positive on the . The precious metal has reached $1,712 area, appreciating about $15 during the US session as market risk appetite faltered after US President Trump stirred the already delicate US-China relationship.
Gold appreciates as US-China tensions escalate
US President Trump announced that the US is working on a strong response to China’s security bill for Hong Kong, which has dampened investors’ optimism about a quick post-COVID-19 recovery.
The market has reacted negatively to Trump’s latest threat to China, concerned about the possibility of a new set of tariffs that would hamper global growth. Investors have returned to the safe-haven gold which had lost more than 2% over the previous sessions as businesses started to open following pandemic restrictions and a moderate improvement on macroeconomic data triggered hopes of economic recovery.
XAU/USD picking up from $1,690 support
Gold’s reversal has been contained at $1,695 (May 11 low). On the , the pair remains moderately positive, trading on an upward trending support line, above the main moving averages.
On the upside, immediate resistance lies at $1,735/45 (May 22, 26 highs) and above there, $1,765 (May 18 high) and $1,780 (Oct 2012 high). On the downside, below the mentioned $1,695, next support levels are $1,661 (April 20 low) and $1,615 (April 18 high).
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