Risk aversion remains the prevailing sentiment in the markets, supporting safe havens and penalising risk related assets; this dynamic is well illustrated by the performance of the euro versus the Swiss franc. Following the declarations of President Trump yesterday, threatening to pull out of the phase one trade deal with China, the franc reached 1.05038 versus the single currency, the highest in 5 years.
Apprehension surrounding a potential second wave of the coronavirus was already dampening the spirits of investors, that had nevertheless found reasons to be hopeful in the partial lifting of the lockdown across Europe and America; now these fears are being compounded by Donald Trump’s latest aggressive tirade towards China, with the markets posture indicating that, faced with the worst economic contraction since the second world war, a reignition of trade tensions between the US and China is the last thing the world’s economy needs
Ricardo Evangelista – Senior Analyst, ActivTrades
Gold is at its forth positive day in a row and, technically, we could be close to a new upside breakout. Bullion spot price is playing with the resistance mentioned in previous reports at $1,730/1,735 and is attempting to break through this level. From a technical point of view, a close of the week above this threshold would be confirmation of the bullish environment and we could see more buyers entering the markets above there, while we would only have a weak signal only below $1,680. We are now in the upside of the lateral channel seen in the last few weeks and buyers are still very active on gold, continuing to push prices up close to the 7-year-high for bullion.
Carlo Alberto De Casa – Chief analyst, ActivTrades