Gold prices fell in early Monday trading, hovering just above $4,030. After touching an all-time high last week, the precious metal has been facing headwinds created by renewed optimism surrounding trade. This optimism stems from progress made in US-China negotiations, which has de-escalated tensions and, at least for now, averted the worst-case scenario of tariffs exceeding 100% between the world’s two largest economies. This positivity has supported greater risk appetite in the financial markets, boosting stocks — with Nasdaq futures hitting a fresh all-time high this morning — and penalising the safe-haven gold. Nevertheless, there is strong support for the precious metal around current levels, above the key psychological threshold of $4,000, and any further declines are likely to be seen as buying opportunities. The macro backdrop remains supportive for gold, given ongoing geopolitical turbulence and economic uncertainty, along with increasingly dovish expectations for the Federal Reserve, accentuated by the lower-than-expected US inflation figures released last week.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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