Gold Prices Fall With Wall Street Stocks As US-CHINA Tensions Emerge

Crude Oil & Gold Key Points:

  • Stock index futures show risk-off bias carried through into the weekend
  • Prices of crude oil signal bearish reversal with the escalation of US-China tensions.
  • Prices of the gold drop with the stocks with the USD gains on haven demand
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The prices of gold fell along with stocks with the escalation of the US-China tension ruined market sentiment. On the other hand, the risk-off bias inspired haven demand for the USD. This significantly weakened the appeal of the anti-fiat options epitomized by gold, driving it down. The prices of crude oil also fell as a defensive backdrop fueled the range of cycle-oriented assets.

The United States was recently reported to be preparing a federal contract ban on organizations using Huawei technology. Also, the Magnitsky Act charges have been leveled against some Chinese officials about human rights abuses that are prevalent in the Xinjiang provide especially within the Uighur community. Recent reports about the surging COVID-19 infections in the United States have also compounded negativity.

Again, the downbeat mood moved from Wall Street to the Asia-Pacific trade. The same is highly likely to happen in the future. The stock index futures that are tracking the top US and Eurozone benchmarks are pointing steeply lower. This implys that liquidation will still carry through the next few days. A sparse provision on the latest economic data tag provides a few challenges that are derailing the established momentum.

Gold Price Technical Analysis

The prices of gold broke out to assess some of the gains after breaking a resistance. This was underscored by the 38.2 percent expansion at about 1789.78. However, this dominant upside remains for now. Suggesting a large bearish reversal possibly needs the daily close fewer than 1747.74. The short-term resistance is at about 1827.82 Fibonacci (50%). The breakout above exposed the 1864.86 Fibonacci (61.8%), thereafter.

Gold Price Chart

crude oil

Technical Analysis of Crude Oil

The prices of crude oil seem to be flirting with the break of the trend line support. This guiding them much higher since mid-May. A confirmation of the closing basis is highly likely to target the inflection level, which stands at 34.78. The 27.40 followed this to about 29.11 areas. On the other hand, the nudge above resistance ranging between 42.40 and 43.88 territories seems like it might set a new stage for the 50/bbl. figure challenge. Also, remember to checkout Prices Of Crude Oil Might Extend Decline After Coronavirus Surge.

As this happens, the new orders for the USA made products declined further. Essentially, it’s highly likely that the demand for US products will sink even further due to the Covid-19 related issues. This will adversely depress exports and fracture the supply chains.

It is also important to take note of the fact that as of today, the Wall Street stocks are pretty mixed. Nasdaq added 0.56% (46.68 points); S&P 500 stocks fell by 0.15% (4.36 points) and the Dow Jones stock fell by 0.51% (120.01 points). WTI Crude Oil Price Analysis for July 8, 2020 further describes what is happening in the energy market.

Airline stocks have also been affected greatly after Warren Buffet dumped more stakes in major airlines.

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