Fear is finally making its way back into the financial markets and pushing gold higher. The outlook for gold works as a hedge against the uncertainty of the financial markets, that’s why XAUUSD is up last week the gold price has been down about 3% across the board and there is fear coming back into the market here.
Spot gold opened stronger on Monday in Asia at $1,287.48, but sliding to back to $1,282.96 20-EMA support, now trading at $1,284.06.
Investors hear conflicting things about the economy and inflation all the time, which drags gold prices in different directions. There are great waves of good and bad economic data, the inflation, the Fed and the back and forth US-China trade's war, each of these seems to be used as an excuse to move the Gold prices around.
The latest headlines keeping the markets worried are the trade war negotiations that are likely to be an ugly affair with no easy resolution, It is not going to be an easy negotiation. Obviously Chinese pushed back on things and the only option Trump had was to put more tariffs on. And this trade war is going to have a big impact on earnings and sales all around the worlds and those who believe we are in the Goldilocks market might have to reconsider.
A more reliable measure when it comes to gold price direction is the physical market. Government and central banks around the world have been ramping up demand for physical gold. China stepped up their buying to 15 tonnes last month, that is very significant.