Gold Up to 1-Week High Amid Risk Aversion on a Quiet Day

Gold is trading positive on Monday as investors are digesting China comments on trade war. Also, a quiet volume trading due to Memorial Day holiday in the United States.

Silver is consolidating levels around 14.60 as the market is trading quiet with low volume. Copper is extending its rebound from 2.165 and it is now trading above 2.7000.

Platinum is trading sideways on Monday as the unit is attempting to get back above 810.00. Palladium is trading down on Monday as the pair remains pressured by the 20-day moving average.

On the other hand, dollar reacted to the news, and it is trading positive on a quiet day. It found support at 97.50, and it is trading back to 97.80.

China says US demands would hurt China core interests

An article published this weekend by the state news agency Xinhua affirmed that US demands on the trade war between both countries are an infringement on Beijing’s core interests. So, it implies that those matters are not up for negotiation.

The note says that the United States is asking China to stop the development of state-owned enterprises in a matter that the agency affirms it is an attempt to violate China’s economic rights and sovereignty and compels China to damage its core interests.

Experts are taking this stance as a sign that a quick resolution for the trade war is not possible as positions of both countries are nothing but extreme.

So, risk aversion has retaken the market with investors going for safe havens such as gold and dollar. Also, a quiet trading environment due to Memorial day in the United States is keeping low volume in markets.

Gold up to 1-week high, but move is limited

Gold started the week with small gains as the metal is joining a risk aversion environment. XAU/USD is testing highs since May 17 at 1,287 but the move is limited as dollar is also posting gains in the day.

XAU/USD is trading positive for the third session in a row as gold is moving at 1,286 and gaining 0.10% so far on Monday against the dollar. The 50-day moving average now contains the unit at 1,290.

“The rise of volatility triggered by geopolitics benefited the yellow metal and if the UK political game of thrones and U.S.-China trade keep uncertainty levels high.” Oanda analyst Alfonso Esparza said in a recent article. “Gold could once again jump above $1,300.”

However, the mentioned 50-day moving average is acting as a short term resistance. Above that, 1,303, May 14 high, and April 10 maximums at 1,310 are levels to watch.

To the downside, if the metal fails at 1,300, the 1,280 level is acting as temporary support, below there, 1,270 and 1,266 are the levels to check.

Silver trades sideways around 14.60

Silver is performing its second consolidation trading day in a row against the dollar as the XAG/USD is moving in a small range between 14.55 and 14.65.

The consolidation move comes after a 1% daily gain performed on May 23. The unit is now fighting to keep levels above the 14.60 area, with the 20-day moving average pushing the pair down.

If the pair manages to break above 14.65, it will find resistance at the mentioned 20-day moving average. After that, a congested area between 14.85 and 15 is waiting for the pair. Then, 15.10 is the frontier.

To the downside, if the pair fails to sustain current levels, it will find support at 14.40, 14.20 and then 13.90.