As we are writing this report gold is trading at $1295 however the white metal is still hovering around $14.70(we have entered in our silver position at $15 last week) U.S. consumer price index report for April got released today which came in at up 0.3% from March and up 2.0%, year-on-year. The expected number of the CPI report was 0.4%.
The U.S.-China trade conflict has been the center of the attention for the precious metal investors and traders. Trump has posted on twitter that there is no hurry to sign deal with China and as a consequence trade war has escalated however market didn't react to this news at all.we have already informed you that U.S. has threatened China to increase more U.S tariffs on imported Chinese goods if trade deal won't be finalized soon. The important news is that Increased U.S. tariffs on imported Chinese goods already went into effect at midnight last night. The surprising part was that Chinese equities showed a significant strength after the news and we are still trying to figure out the valid reason. one thing is pretty clear that investors are not afraid enough despite Heightened global trade tensions which could push gold prices higher.
That's quite a big news that despite the U.S. government increased tariff on $200 billion of Chinese imports with 25 %, the market didn't react to this new development at all. That shows a heavy disappointment for the precious metal bulls and favors our existing positions. To be precise the yellow metal should have reached around $1310 or even higher on this news, Gold managed to surge only $20 even when equities drop more and reached their six-week lows. what does it indicate? obviously not a sign of bullishness.
Gold has managed to stay above the $1,270 level due to increased interest from central banks. But, that can only do so much, warned Scotiabank.
“CBS bought ~146t of Gold in Q1, the highest Q1 purchase since 2013 … And while CB buying from EM CB and the usual candidates (China, Russia, India, etc) is supportive for Gold , it’s a well-known fact and almost backed into $1250-1300 prices. Only CB purchases from new regions and/or a significant ramp up in the pace of usual suspect purchases is mildly Gold ,” Scotiabank said.
We have already informed you that China's economy has been affected the most in this ongoing U.S-China trade war and today we have seen another china report on this where China reported that it's exports dropped by 2.7% in April Y.O.Y compared to 14.2% gain in March. The U.S imposed tariffs on
Still, there has been technical damage inflicted on U.S. stock indexes recently, to suggest they have put in near-term tops and can now only trade sideways at best for at least the time being.
our current bias-The bears are in the full control and have the overall technical advantage in gold and silver market ,overall we believe the boring price movement which we have witnessed from weeks in the precious metal sector has already ended and the serious technical damage in P. Ms charts has already inflicted however the next breakdown could be more severe enough.