Gold Recovers to $1502 After Earlier Sharp Selloff to $1487 - Gold Today September 27, 2019
Jim Pogoda, Senior Gold Trader, Gold Bullion International
Overnight – gold tumbles to $1491 against upbeat comments from China on US-Sino trade prospects, Saudi ceasefire in Yemen
· Gold traded lower last night, sliding in a range of $1507 - $1491.
· It edged up to its $1507 high during Asian hours against a modest pullback in S&P futures (-8 to 2972) and a slight softening in the US dollar (DX to 99.14).
· The yellow metal tumbled during European time, tripping stops below key support at $1502 (up trendline from 5/30 $1275 low) and then $1501 (double bottom - 9/25 and 9/26 lows), $1500 (psychological level, options), $1498 (9/20 low) to reach $1491.
· Gold was pressured by a rebound in S&P futures (+12 to 2992) and a move higher in the US 10-year bond yield (1.687% - 1.725%).
· Stocks were lifted by positive comments from Chinese Foreign Minister Wang Yi (hopes for continued momentum after recent goodwill gestures, talks can progress if both sides are proactive, with talks set to resume Oct 10-11 in Washington), along with the Saudis announcing a partial ceasefire in Yemen (WTI oil plunged from $56.61 - $55.57).
· A rebound in the DX (99.31 – 3 week high) during early European was also a headwind for gold, lifted by weakness in the pound ($1.2335 - $1.2271, BOE’s Saunders says next move could be a rate cut even if no-deal Brexit is avoided) and the euro ($1.0923 - $1.0907, fresh 28-month low, weak German Import Prices).
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