During Tuesday trading sessions, gold futures were pressing their highest level since June 19 on 2018 as a reaction to a weaker U.S. Dollar and lower demand for risky assets. Worries over U.S. and China trade tensions ahead of this week’s high-level talks in Washington on January 30 and 31 were the catalyst behind the price action.
Concerns escalated after the U.S. Justice Department charged China’s Huawei Technologies Co Ltd with fraud.
The Fed meeting on this week is a key event that could make the gold. The meeting started on Tuesday and will be a two-day meeting, where the central bank will be widely expected to leave its benchmark interest rate unchanged. Market moving events will be its decision to end its balance sheet reduction program.
Traders aren’t sure about what could be announced from the central bank about its ending at the meeting, but getting on details, it would likely be put on a dovish spin on the meeting.
Another thing that will have gold traders’ attention would be on the earnings reports and risk appetite that came after Monday’s bearish earnings reports from Caterpillar and Nvidia, where traders seemed to blame on China’s weakening economy and the impact of the trade dispute.
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