US-China trade negotiations may be delayed until the US presidential election
In this review, we suggest considering the composite gold instrument Gold vs S&P 500 Index. Will the XAUSnP rise? Such a movement is observed when gold prices rise, and the S&P 500 decreases.
Gold is a safe-haven asset and its prices rise in case of an increase in political risks. These risks have increased amid US President Donald Trump's statement that trade negotiations with China could last until the US presidential election in November 2020. Let us recall that on December 15, a number of duties on imports of Chinese goods to the US may be increased. This will strengthen tensions between the two countries. The other day, Donald Trump increased duties on steel and aluminum from Brazil and Argentina. Meanwhile, gold reserves in the largest SPDR Gold Trust fund have been at a minimum since mid-September of the current year and amount to 889.2 tons. At that time, gold was more expensive - about $1,500 per ounce. Recovery of reserves can positively affect gold prices. The US stock index S&P 500 has fallen by about 2.5% since the beginning of this week. The reaction to Donald Trump's statement was sharply negative. Besides, the ISM Manufacturing indicator for November, which turned out to be weak, was published on Monday. The U.S. employment report and an important Non-farm Payrolls indicator, which may affect the S&P 500, will be released on Friday.
On the daily timeframe, XAUSnP: D1 is correcting up from the lower boundary of the long-term uptrend. It is the lower boundary of a large triangle. A number of technical analysis indicators formed buy signals. The further price increase is possible in case of the transfer of trade negotiations between China and the US and publication of weak corporate data in the US.
Summary of technical analysis
In this review, we suggest considering the composite gold instrument Gold vs S&P 500 Index. Will the XAUSnP rise? Such a movement is observed when gold prices rise, and the S&P 500 decreases.
Gold is a safe-haven asset and its prices rise in case of an increase in political risks. These risks have increased amid US President Donald Trump's statement that trade negotiations with China could last until the US presidential election in November 2020. Let us recall that on December 15, a number of duties on imports of Chinese goods to the US may be increased. This will strengthen tensions between the two countries. The other day, Donald Trump increased duties on steel and aluminum from Brazil and Argentina. Meanwhile, gold reserves in the largest SPDR Gold Trust fund have been at a minimum since mid-September of the current year and amount to 889.2 tons. At that time, gold was more expensive - about $1,500 per ounce. Recovery of reserves can positively affect gold prices. The US stock index S&P 500 has fallen by about 2.5% since the beginning of this week. The reaction to Donald Trump's statement was sharply negative. Besides, the ISM Manufacturing indicator for November, which turned out to be weak, was published on Monday. The U.S. employment report and an important Non-farm Payrolls indicator, which may affect the S&P 500, will be released on Friday.
On the daily timeframe, XAUSnP: D1 is correcting up from the lower boundary of the long-term uptrend. It is the lower boundary of a large triangle. A number of technical analysis indicators formed buy signals. The further price increase is possible in case of the transfer of trade negotiations between China and the US and publication of weak corporate data in the US.
- The Parabolic indicator gives a bullish signal
- The Bollinger bands have narrowed, which indicates low volatility. The lower Bollinger band is titled upward
- The RSI indicator is above 50. It has formed a positive divergence.
- The MACD indicator gives a bullish signal.
Summary of technical analysis
Position | Buy |
Buy stop | Above 0.487 |
Stop loss | Below 0.46 |