Gold sits better bid on dollar weakness but remains sideways

• Gold traders wait for announcements from Trump with respect to tariffs on Chinese imports.
• Gold still sideways within familiar ranges. 

Spot gold has been heading higher on dollar weakness and made a high of $1,204.80, rallying from $1,192.77 while the DXY traded 95.06 all the way down to 94.38 while investors figured that Trump will not go in so hard on China, and potentially only impose 10% tariffs if any at all. 

There had been reports circulating that Trump will “only” impose a 10% instead of 25% tariffs on $200 billion of Chinese goods. The key risk is whether the Trump will antagonise China enough to cause a retaliation and 10% is regarded as a simple chess move that is unlikely to rock the apple cart. 

However, a fresh round of tariffs, regardless of the sum, is unlikely to sit well with the Chinese who had already vowed to strike back when these extra tariffs were first proposed by Trump. Trump's economic adviser said that theU.S. wants serious trade talks with China and as such, perhaps Trump will take it easier in order to hook Xi in to try and find a solution to this ongoing dispute. 

Eyes on DXY breakouts

Meanwhile, the DXY bulls need to see a break through 95.70 although 93.80 is becoming more and more into scope on the downside. 

Gold levels

Gold is still sideways between 1214 and 1182. For bulls to get back control, whereby the market is heavily short of gold and to reconsider its positioning, (net speculative short positions, or bets an asset’s price will fall, in gold, are up 275% year to date), then they need to get and hold above the 50-D SMA at 1211 first, then 1214 which is resistance and then the 200-W SMA at 1233 will need to be challenged. A retry of the downside now should target 1146/22 monthly levels.