Gold prices traded firmly above five-week lows on Wednesday as traders sought the safe-haven commodity as the global stock rally of recent sessions lost steam. Gold futures were up 0.27 percent as of 1:59 p.m. HK/SIN, to $1,288.10 per barrel, a nice rebound from the low of $1,280.70 hit on Tuesday. Technical analysts warn, however, that although the precious metal was able to regain some traction it maintains bearish signs in the short term, and there is room for an additional downturn before it breaks out to the upside. The markets have been volatile in recent sessions as traders swing between wild optimism about a trade deal between the United States and China, and concern that President Trump will thwart the progress by rejecting a plan in its final hours.
The U.S. dollar also remained strong on Wednesday after a positive day on Tuesday, supported by better-than-expected data on Tuesday which showed positive news about U.S. services industries. High home prices also hinted to a strengthening of the U.S. economy, lending support to the dollar. The dollar index was up 0.07 percent to 96.93 .DXY in the mid-afternoon. The pound slid 0.32 percent against the greenback after soaring in recent sessions, and was last trading at $1.3132. The euro also eased against the dollar, down 0.12 percent to $1.1293. The dollar was trading lower against the yen after gaining in the past few sessions. Its last price was 111.80.
Stock Rally Stalls
The global stock rally that started the week with great promise appears to have stalled, hampered by renewed concerns that the U.S.-Sino trade talks weren’t going as smoothly as originally thought. Wall Street suffered another down day on Tuesday with all three benchmark indexes closing modestly lower, and Asian markets reacted by trading mixed on Wednesday after heading higher earlier in the week. The Nikkei 225 was down for the second consecutive day, as was South Korea’s Kospi. The indexes were down 0.55 percent and 0.14 percent respectively. Australia’s ASX 200 managed to head higher after a down day on Tuesday, buoyed by renewed expectations for an interest rate cut sometime this year. The index was up 0.75 percent. Both of China’s benchmark indexes were also higher on Wednesday afternoon.