*Equity markets trade lower *Traders eye G-20 outcome *Gold and oil trade choppy
European markets are picking up the momentum from Asian trading session which was primarily weak. Stocks moved lower over in Asia despite the fact that Wall Street broke its four day losing streak yesterday. The focus is on the G-20 meeting and investors are trying to make sense of any new development coming out of Japan with respect to the trade war between the US and China.
Trump needs to understand that it cannot bully its way in, especially not with the second biggest economy of the world. President Xi, has made it clear that he is ready to talk, but the ground needs to be balanced for both sides. US trade representative, Robert Lighthizer, has told China that nothing will be even-handed, because of the violation of intellectual property.
Market participants are hopeful that both countries will resolve their issues and they will use the current opportunity to lay down the frame work of their future talk on trade negotiations. This is because President Trump has said that China wants a deal more than the US. The White House economic advisor Larry Kudlow believes that if the China doesn’t come to their terms, pushing for more tariffs is the only way forward.
Gold Prices To Remain Choppy
Gold price is going to remain very choppy as we go into weekend because of the ongoing G-20 meeting. Traders are going to see if there is optimism around the trade war between the two super powers and if the situation doesn’t show any signs of easing, then it means that the Fed will have to intervene. I am expecting the gold price to hold above the support level of 1370 and as for the upside, the resistance of 1450 is significant. Also, after the G-20 meeting, a factor which is going to be of significant importance is the US NFP data, the Fed’s next move is data dependent.
Oil and G-20 Meeting
As for the oil price, let’s see if other countries can support Iran, clearly the UAE has made its position clear that they are not supporting the US accusing Iran about the recent events. This is a meaningful development. If Iran and US open the door of negotiation about a new deal, we expect the oil price move lower to the level of 54 or even lower. However, if the outcome of the G-20 meeting shows that Iran has lost support of countries like the UK and France, this could push the price higher and WTI could touch the level of 63