- Gold continued to gain strong positive traction for the fifth consecutive session on Friday.
- The worsening of American-Chinese relations seems to be a key factor in fueling the current dynamic.
- Moderate action on prices in USD canceled out the prevailing risk climate and remained favorable.
Gold maintained its strong auction tone at the start of the European session and was last seen near multi-year highs, just above the $ 1,760 level.
The precious metal continued its recent positive movement and gained strong follow-up traction on the first day of a new trading week. The upturn marked the fifth consecutive day of positive product development and was fueled by worsening US-China relations.
The US Department of Commerce has decided to block the supply of chips to Huawei Technologies. Subsequent reports have signaled possible retaliation from China, which, along with fears about the second wave of coronavirus infections, has taken advantage of the yellow metal refuge status.
Conversely, the US dollar has struggled to attract significant purchases despite optimistic comments from Fed President Jerome Powell on the US economy. Moderate action on prices in USD remained favorable to the strong tone of supply around the product in dollars.
Meanwhile, the positive momentum underway at the highest level since October 2012 did not seem to be affected by the prevailing risk climate, which continued to be supported by easing lock restrictions in some parts of the world and rekindling hopes of a rapid global economic recovery.
It will now be interesting to see if the bulls are able to maintain their dominance or to reap some benefits from the table in extremely overbought conditions on the hourly charts and in the absence of moving economic press releases on the American market.