Details Cookies
Cookie policy

This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy here and our privacy policy here

UPDATE: Buying gold on rising trade tensions UPDATE: Buying gold on rising trade tensions UPDATE: Buying gold on rising trade tensions

UPDATE: Buying gold on rising trade tensions

Trade View
Short Term / Buy
Ole Hansen

Head of Commodity Strategy

Instrument: Spot: XAUUSD, Future: GCQ8 or CFD: GOLDAUG18
Price Target: ½ at $1,306/oz. and ½ TBA
Market Price: : ½ at current level around $1,273/oz and ½ on a break above $1,286/oz.


UPDATE: Gold has weakened further as the technical picture has continued to deteriorate while improved gold fundamentals such as trade tensions, a slightly weaker dollar, lower US bond yields, and a continued decline in global stocks have failed to make an impact. 

The price has hit $1,258/oz which was our stop on the ½ long entered last week. The “death cross” (which occurs when the 50 DMA crosses below the 200 DMA) has received a great deal of attention and likely supported additional selling this week. 

The 14-day RSI is now showing gold to be the most oversold since December 2016. The next major level of support can be found just below $1,240/oz. while potential buyers are likely to sit on the fence until we see a break back above $1,286/oz.


A trade war between the US and China looks increasingly likely. The ramp up in trade tensions continued overnight when China vowed it would retaliate after Trump threatened to impose  fresh tariffs on $200bn worth of Chinese goods. The market has responded by sending the dollar and bonds higher and stocks lower. Gold remains caught up in this battle between the strong dollar versus raised geopolitical risks. 

It’s our view that the higher the dollar climbs on trade frictions the more global growth could end up suffering as consequence. A trade war leaves no winners, especially not the already heavily indebted emerging market economies which are faced with lower activity, a weaker currency and rising dollar debt. 

On that basis gold is likely to continue to struggle in the short term as the dollar appreciates. But with stock market volatility on the rise and bonds back in demand we see a favourable outlook for gold emerging.


Entry: One ½ at current level around $1,273/oz and the other ½ on a break above $1,286/oz
Stop: 1 1/2 ATR = $15/oz below entry (move stop higher once both entry levels have been hit)
Target: ½ at $1306/oz. and ½ TBA
Time Horizon: Short-term


Gold is looking for support from lower US 10-year real yields and a potentially stronger JPY as risk-off sentiment spreads:

Sentiment has yet to recover following last Friday's washout of speculative longs and with the dollar, especially against EM currencies and the euro, continuing to rise potential buyers need to be patient. This is why we are recommending a gradual, step-by-step approach to position-building.
Short-term chart.                                                                                                                         Source: Saxo Bank
Long-term chart.                                                                                                                              Source: Saxo Bank
Management And Risk Description:

The biggest challenges of being long gold are lower oil prices as this reduces inflationary pressure, a poor technical picture following the recent sell-off and a continued dollar surge.  Should the US and China once again step back from the brink a relief rally across other assets may also hurt gold's prospects. 

The first stop level $15/oz below entry will take it below support at $1,267/oz, the 76.4% retracement of the December to January rally. Our second entry level at $1,286/oz reflects the previous support that was broken last Friday while the first take profit is just ahead of the 200-day moving average at $1,306/oz, a level which has provided strong resistance in recent weeks. In order to isolate additional dollar appreciation XAUEUR can be considered as an alternative.

A compiled overview of Trade Views provided on can be found here (


Saxo Capital Markets Pte. Ltd. (“SCM SG”) may distribute information/research produced within the Saxo Bank Group pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, SCM SG accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact SCM SG at +65 6303 7800 for matters arising from, or in connection with the information distributed. All legal documentation and disclaimers can be found at

Please read our disclaimers:
- Full Disclaimer (

Saxo Markets
88 Market Street
CapitaSpring #31-01
Singapore 048948

Contact Saxo

Select region


Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.