The pound continues to lose ground to both the dollar and the euro during early Tuesday trading. The British Prime Minister will meet the President of the European Commission later in the day with the two leaders trying to find common ground after their negotiating teams apparently find themselves at a deadlock and unable to agree on some core issues. The future relationship between the two parties now rests in the politicians’ hands, with most investors still expecting a deal to be reached. However, such hopes will start to dissipate if there is no progress after today’s encounter. The last few days brought moderate losses for the pound, as investors gently started to price-in the increasing likelihood of no-deal, but should the impasse persist after today’s meeting between Ursula von der Leyen and Boris Johnson, more intense selling pressure will start to build around the British currency.
Gold broke through the resistance level at $1,850 as the weakening US Dollar, some bits of risk off on stock markets and a final attempt of the Trump team to renew its campaign against China pulled up financial demand for bullion. Moreover, the drop in price of the last few weeks has lifted up physical demand, generating the perfect environment for a rebound for the spot price. This is exactly what we have seen in the last few days, when gold was able to jump up from the four-month-low and recover, surpassing the key level of $1,850. Technically, the short-term trend remains supportive, while enlarging the zoom, there could still be some bearish pressure due to some profit-taking and the continuation of the risk on approach seen in November albeit with the odd day of exception, like yesterday.
Carlo Alberto De Casa – Chief analyst, ActivTrades
Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.
