Gold is positive on Tuesday as investors are digesting emotions that a Trade war resolution is not expected anytime soon. Trump tweeted that he expects China to favor the US in some way.
The tweet hurt market confidence for a trade war resolution as it is the kind of message that will delay any solution between the two superpowers.
Also, the long week with a US bank holiday and the employment report on Friday are making investors to put trades on hold.
The market is expecting a slow and long week as the United States will be on vacation from Wednesday night until the weekend as the Fourth of July day will be on Thursday.
The US employment report will be released on Friday with an expected low volume trading atmosphere, so expect some violent movements due to the lack of volume. However, the real action will occur on Monday when the US will be back at work.
Gold positive on Monday, but the week is long
XAU/USD is trading in consolidation mode after the deep decline performed on Monday. The unit found support at the 1,380 area, where the yellow metal started to build some sideways. It is now trading 1.80% positive at 1,390.
Monday’s decline was due to the hopes for a trade war resolution soon, but Tuesday’s is giving us a hangover after the “overreaction” as FX Empire analyst James Hyerczyk said in a recent article.
“The price action suggests that the sell-off on Monday may have been an overreaction to the news of renewed trade talks between the United States and China,” Hyerczyk said. “Although the strength in the US Dollar, which fueled most of the selling pressure on dollar-denominated gold, was the right response from gold traders.”
In the case gold fails to sustain levels above 1,380, it will go all the way down to 1,360 and then 1,345. Then, the 1,300 area will be exposed again.
To the upside, the bullion should recover the 1,400 area before start thinking in a bullish construction. Above there, 1,420 and the multi-year high at 1,440 will be the frontiers.
Metals report for July 2
Silver is trading negative on Tuesday as the metal is extending Monday’s decline from the 15.50 area. Currently, the unit is breaking below the 15.10 area as it is trading 0.50% negative on the day at 15.05.
Copper is extending its Monday’s rejection of the 2.7500 area as the mineral is breaking below the 20-day moving average at 2.6745 to trade as low as 2.6635. Currently, Copper is moving at 2.6700, 0.50% down on the day.
Palladium is advancing quietly on Tuesday as the pair is building a new leg for another attack to the 1,570 resistance. Currently, XPD/USD is moving at 1,550, 0.17% up on the day.
Platinum is down for the second day as the metal was unable to sustain gains at the 850.00 neighborhood and it started falling on Monday. Today, XPT/USD is trading 0.50% down at 827.00.
This article was originally posted on FX Empire
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