Gold dropped slightly during the Asian trading session on Tuesday amid conflicting statements from White House officials and the subsequent reaction of stock indices.
In an interview with Fox News, presidential adviser Peter Navarro answered affirmatively to the journalist’s question regarding the US-China trade agreement being no longer valid. This comment triggered a panic in the financial markets. Other representatives of the White House immediately intervened in the situation and denied this information. Donald Trump was forced to tweet, in which he confirmed that the trade agreement between the countries continues to be valid and he hopes that the Chinese side will continue to fulfill the agreements reached earlier. Later, Navarro himself stated that his words were taken out of context and not correctly interpreted.
Numerous rebuttals of Navarro’s initial statements supported stock indices that moved into the green trading zone. Considering the aforementioned, gold and other protective assets experienced local pressure.
Today it is worth paying close attention to the news of coronavirus spread. Investors expect the outbreak of a second wave of a pandemic that could harm the recovery of the global economy. In such a case, the demand for traditional protective assets should remain stable.
In the economic calendar today it is worth paying attention to the publication of preliminary data on the PMI of the manufacturing sector and services in the EU and the US. In addition, US data on May sales of new housing will be published today.
Regarding the chart, trading takes place in the range of 1745.00-1765.00. An upward break from this range remains the priority scenario.
Resistance Levels: 1765.00, 1780.00, 1800.00;
Support Levels: 1745.00, 1723.00, 1705.00.
The main scenario - a rollback towards 1745.00 and growth in the direction of 1765.00.
An alternative scenario - consolidation below 1745.00 and a decline to 1723.00.
The current fundamental outlook remains neutral. We would consider longs from the level of 1745.00