Gold prices surged during the Asian trading session on Wednesday. They touched their worst levels in more than a week. The precious metal’s recent performance has been largely influenced by continued geopolitical tensions. Further boosting its success is a positive mood related to US-China trade relations.
Gold is currently trading around the key $3,300 level. That said, increasing numbers of market participants are looking forward to a day when it clears this threshold in a more sustained way. This is significant as analysts have indicated that this level will be key for investors looking to place new bets on the commodity.
Recent trends make it clear that the geopolitical climate is still very much in favor of safe-haven assets, including gold. As the myriad of uncertainties continues to cast a shadow over global politics, investors have continuously relied on gold as a haven investment. Recently, optimism about progress being made in US-China trade discussions has been pushing this trend even further. Consequently, it has established a more positive environment for gold prices.
Additionally, a generally weaker US dollar has improved gold’s attractiveness. Generally, a weaker dollar compared with other currencies is bullish for gold since it makes the precious metal cheaper for foreign purchasers. This positive tone is already being expressed in the markets, as investors continue to show a strong positive risk tone.
With the yellow metal’s recent uptrend gold prices consolidating, gold market experts still have faith. They are hopeful that gold will be able to sustain its rally beyond the $3,300 level. If it does, it would set the stage for even higher price increases.
“Gold price looks to build on its recent strength beyond $3,300 mark.” – www.fxstreet.com
Beyond these geopolitical causes for gold’s price movements, the broader economic conditions in China are playing a role. Recent reports have pointed to a slowdown in China’s economic growth, illustrating the effect of persistent uncertainty. This new reality has forced investors to re-examine their approach and prioritize safe-haven investments more than ever before.
“China April slowdown shows the impact of economic uncertainty.” – www.fxstreet.com