European Open – Trade Talks, Fed, Gold, Oil

Published 10/10/2019, 05:37 AM
XAU/USD
-
GC
-
LCO
-

Trade Talks Dominate

A mixed start to trading in Europe on Thursday as traders weigh up the various reports from Washington and the Fed minutes leave the easing door ajar.

We’re getting very mixed messages from the trade talks this week, with some even suggesting the Chinese delegation may return to Beijing 24 hours earlier than planned. That doesn’t exactly fill you with hope that a deal, limited or comprehensive, is imminent.

Still, traders will be monitoring the progress extremely closely with market sentiment being closely tied to the talks. Reports that China has offered to increase soybean purchases in an attempt to thaw relations between the two countries is obviously a positive, as are reports that the U.S. is prepared to grant licences to allow US firms to trade with Huawei.

Ultimately, goodwill gestures are great but it doesn’t resolve the deep divides that clearly exist on certain issues which makes a deal in the foreseeable future unlikely. That means lower global growth and more easing from central banks, as indicated in the Fed minutes on Wednesday.

Gold buoyed but struggling again

Gold has naturally been buoyed by the prospect of more interest rate cuts from the Fed and the softness we’ve seen in the dollar this morning but again, it’s struggling to make any real strides. Gold bulls are not giving up without a fight but it has once again run into resistance around $1,520, the same level it rebounded off last week.

Another failure to break through here may be a confidence boost for sellers. The next 36 hours is likely to be headline heavy on the trade war front which may determine whether gold can indeed break this tricky resistance and take another run at the highs.

Gold Daily Chart

Gold Daily Chart

Oil steady around summer lows

Oil prices remain very sensitive to trade developments and their impact on the global economic outlook. Crude continues to hover around its summer lows, with Brent choppy between $55 and $60 and showing little signs of breaking this range. Yesterday’s inventory data fell on deaf ears and traders looked past a larger than expected build and instead focused on events in Washington. If talks turn sour then the $55-56 support could come under real pressure.

Brent Daily Chart

Brent Daily Chart

Economic Calendar

Economic Calendar

Original Post

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.