Gold Falls 1.4% As Trade Truce Sees Gold Futures Sold Overnight

By Mark O’Byrne of GoldCore

CEO, GoldCore • Jul 1, 2019 at 9:56 AM EDT

Gold fell 1.4% from a six-year high to back below $1,400 at $1,390 an ounce today as traders took profits and sold gold futures after the U.S. and China agreed to a trade war truce.

Gold fell 1.4% from a six-year high to back below $1,400 at $1,390 an ounce today as traders took profits and sold gold futures after the U.S. and China agreed to a trade war truce.

Risk assets like stocks got a bounce higher while safe havens like gold and the Swiss franc came off as traders digested the better than expected news from the G20 summit. Gold prices fell after the leaders of the two largest economies, Trump and Xi Jinping, simply agreed to resume negotiations.

Markets and many investors are increasingly concerned about the outlook for the U.S. and the global economy. Participants will now focus on the U.S. jobs data which is due Friday.

Gold’s sell-off may continue this week and further correction is likely given the scale of the gains in the last month. Gold’s correction is likely to be temporary and will provide an attractive entry point for those seeking to take a position or buy gold. Dollar, pound and euro cost averaging and accumulating remains prudent.

The long-running and deepening trade, currency and geopolitical tensions will not disappear any time soon and looser monetary policies will also support gold.

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