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Breakdown in U.S.-China talks to send gold surging above $1,500 - FXTM

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A total breakdown of U.S.-China talks could potentially trigger a global recession and send gold prices above $1,500 an ounce, according to FXTM. “While not a base case for most investors at present, a complete breakdown in the current trade talks should send Gold surging back above $1,500 while potentially paving the way for a global recession,” writes FXTM market analyst Han Tan. As markets start to doubt the progress surrounding the ‘Phase I’ trade deal, gold is gaining ground. But, even if a limited deal is signed, gold is still likely to end the year “with its double-digit annual gain intact,” FXTM says. A new potential obstacle on the horizon is the U.S. Senate passing legislation in support of the Hong Kong protests. “Such a move threatens to drive a wedge into ongoing U.S.-China negotiations while potentially raising the barrier to a trade deal,” the market analyst writes.

By Anna Golubova of Kitco News; agolubova@kitco.com

 

Gold remains range-bound but ‘gold bugs ain't dead’— TD Securities 

Wednesday November 20, 2019 09:15

Gold prices remain range-bound, but things could look up as the Federal Reserve goes back to cutting rates, says TD Securities. “The mood in U.S.-Sino trade negotiations are helping gold prices firm yet gain, although the unscheduled meeting between the U.S. President and the Fed Chair is likely providing additional importance to this piece of information in the mosaic that forms the market's investment thesis,” TD Securities strategists write. The meeting comes as Powell pursues a pause after cutting rate three times this year. “Some gold bugs are anticipating that the White House could be looking for reassurances that the Fed is ready to provide a backstop to the government should the trade war escalate,” the strategists say. This development could give gold a reason not to sell further but “gold prices will remain range-bound for now,” according to the bank. “Looking forward, however, the gold bug ain't dead. Certainly, the yellow metal will offer optionality to the potential for further easing — TD Securities still expects the Fed to cut rates twice more in 2020 — while allowing money managers to benefit from a trend of lower real rates.”

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