US President Donald Trump is currently in Beijing for discussions with Chinese leader Xi Jinping during a pivotal period for the global economy.
Tesla’s Elon Musk, Apple’s Tim Cook, Nvidia’s Jensen Huang, and Goldman Sachs’ David Solomon are among the roster of top business executives accompanying Trump on his visit.
Other big names joining Trump include BlackRock Chairman and CEO Larry Fink, Citi Chairman and CEO Jane Fraser, Blackstone CEO and co-founder Stephen Schwarzman, and Boeing CEO and president Kelly Ortberg.
Trump wants China to open its markets to American companies, increase investment and job creation in the US, and buy more American agricultural products, such as beef and soya beans.
Trump, who is facing growing unpopularity at home due to rising prices arising from the Iran war, has flagged his intention to use the summit to press China to “open up” its vast market to US firms.
Undoubtedly, surging expectations that Beijing can pressure Tehran into reopening the Strait of Hormuz should be tempered.
But I find that Iran currently has 30 different small military groups acting independently. This is not something where China can come in and say, ‘Hey, we want to make peace.
I anticipate that even small shifts in tone or wording could have wider implications for markets and regional security, as despite intense US pressure on Beijing to use its influence over Tehran, China is unlikely to significantly expand its role in the conflict.
Upon evaluating the movements of futures on the daily chart, I find that the gold futures could remain volatile before this week’s closing, as currently bearish signals look evident enough for a breakdown below the immediate support at the 9 EMA ($4,689), where a sustainable move below this support could push the futures to test the next support at the 100 EMA ($4,657).
Conversely, a breakout above the immediate resistance at the 50 EMA ($4,735), followed by a sustainable move above the next significant resistance at $4,783, could push prices higher.
Undoubtedly, markets can see a TACO (wall street nickname for a specific, pattern-based trading strategy, involving capitalizing on market volatility caused by President Trump’s tendency to threat for higher and severe outcomes, especially on weekends, and subsequently walk them back or reduce action on Tuesday or Wednesday) rally on Friday.
If equity markets rally and precious metals see a steep slide from the current levels on Thursday and Friday, the whole scenario could see a reversal on Tuesday or Wednesday.
Though the , after testing a low at 6321 on March 30, rallied with a gap-up on April 7, this rally accelerated and continued an uptrend. On Wednesday, after testing a low yesterday at 7,340, currently at 7,444, signalling selling pressure at the current levels as the traders look cautious over the final outcome of the Trump-Xi meet.
On the other hand, oil futures look full of bullish sentiments as the markets are expecting China not to extend pressure on Iran.
Disclaimer: Readers are advised to take any position in gold, , , and the S&P index at their own risk, as this analysis is based solely on observations.