Nancy Pelosi, the speaker of the US House of Representatives, is rumored to be traveling to Taiwan on Tuesday, which has Beijing seething and raising the prospect of retaliation.
A representative for the Chinese Foreign Ministry cautioned the severe repercussions of every visit in reaction to reports of Ms. Pelosi’s trip, adding that China is completely equipped for any situation. Riskless assets, including gold, will see a significant haven bid if Ms. Pelosi travels to Taiwan and China fights back, as it has explicitly stated it will.
Since July 21, when it struck a brand-new one-year low of $1,680 per ounce, gold has climbed rapidly higher. The surge has resulted in a nearly uninterrupted string of greater highs and lower lows, and in the meantime, it has destroyed the 20-day simple moving average (SMA).
The 50-day simple moving average (SMA) is slightly lower at $1,783.5 per ounce, and gold is now approaching a region of past support, becoming resistance on each part of $1,787 per ounce. There must be a significant risk factor if gold surpasses this resistance zone.
According to data from retail traders, 58.00% of traders are net-long. From Monday and the week before, net-long traders are 0.11% higher and 15.11% lower, respectively. Correspondingly, net short traders are 4.85% higher and 29.88% higher from Monday and the day before.
The notion that traders are net-long signals that gold prices may keep falling. However, traders are much less net-long on Tuesday than they were on Monday and the week before. Ignoring the fact that traders are still net-long, radical changes in attitude warn that the present Gold price pattern may likely turn higher.