Gold has spent the past couple of days attempting to break out of the 30-dollar range established during the past month. The latest move, like so many others in recent months, being driven by comments from Beijing and not least Washington related to the ongoing efforts to agree on a phase one trade deal.
These efforts received a knock on Tuesday when President Trump downplayed the urgency of a deal saying that it might be best to wait until after the November 2020 election. China meanwhile aggrieved by recent Senate votes on Hong Kong and Xinjiang said that the US will pay the price and that they on trade would not set any timeline or deadline.
However, the gold rally and drop in stocks and yields that these comments helped trigger became unstuck earlier today when Bloomberg News joined in by writing that according to sources US and China is moving closer to a trade deal despite the heated rhetoric.
These developments highlight the pain investors and traders across the world have felt in recent months with alternating news creating the current dump and pump price action. With end of year coming up we risk seeing liquidity go down and volatility up with traders either opting to close their books or move to the sideline while waiting for tangible news on the trade front.
Later today the trade talk focus may temporarily be pushed aside when the US ISM Non-Manufacturing Index for November is released at 15:00 GMT. Market expectations point to a small reduction to 54.5 from 54.7 previously, but still well into expansion territory. The non-manufacturing sector accounts for a majority of the U.S. economy hence the importance.