Investors have stayed away from risk assets after the US slapped tariffs on $50bn worth imports from China, raising the stakes in a growing trade showdown with Beijing. How is the yellow metal impacted by this? Stay updated with this 4 April XAUUSD Technical Analysis.
4 April, GKFX – Gold (XAU/USD) is trading comatose around $1,334 in Asia but may find bids during the day ahead as S&P 500 index futures indicate the stocks are likely to open on a negative note, courtesy of escalating US-China trade tensions.
Escalating trade tensions weigh over risk assets
On Tuesday, the Trump administration revealed plans for a 25 percent tariff on 1,333 Chinese products ranging from industrial robots to locomotives. The total value of the goods subject to the tariffs is approximately $50 billion.
Meanwhile, China immediately vowed to retaliate, boosting fears of full-blown US-China trade war. Consequently, the S&P 500 futures are reporting a 0.30 percent drop. So, the yellow metal could gain altitude on safe-haven appeal. Also, US ISM non-manufacturing release and the resulting action in the dollar index (DXY) could influence the yellow metal.
4 April XAUUSD Technical Analysis
A break above $1,338 (10-day moving average) would open up upside towards $1,345 (April 2 high) and $1,352.4 (Jan. 29 high). On the downside, breach of support at $1,331.53 (session low) could yield a pullback to $1,329 (50-day moving average) and $1,321.25 (March 29 low).
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