European markets are set to open lower as investors are ready to build on the momentum from Wall Street. Major US benchmark indices closed in negative territory as investors became increasingly anxious due to the Trump’s comments which criticized China’s unfair trade practices. Moreover, investors are also worried about the ongoing drama over in Washington which could possibly end up in Trump impeachment. House Democrats are opening up a formal investigation against President Trump and the allegations are that Mr. Trump withheld $400 million in aid to Ukraine. However, the president has maintained his stance that he has done nothing wrong and he is going to release the full transcript of his call today.
Johnson To Face MPs
Closer to home, the UK’s prime minister is expected to face his biggest nightmare after losing a battle in Supreme court yesterday. The prime minister will face MPs today. Putting a brave face isn’t going to work for Mr. Johnson because the message is very clear from the lawmakers that they have zero confidence in his ability. The prime minister is hopeful that his new proposal to Brussels, an alternative to Irish backstop, may actually get a green light, and this could aid the process of recovery from his political setback.
The sterling-dollar paired spiked yesterday on the back of the court’s decision. However, the currency has given back all those gains because of the thickening of the Brexit cloud. The fact is that the period of uncertainty is going to get prolong as the UK will have no option but to ask for another Brexit extension from the EU. This means more pain for another few months while lawmakers will try their best to find a solution.
More Upside For Gold
There is no shortage of good news for gold traders, it seems like the sentiment is only getting better. The impeachment dust over in the US, escalating tensions between the US and China after Trump’s speech, and targeting Iran as a major culprit of the recent incidents which happened over in Saudi Arabia, all of this have all supported the recent move in the gold price. The precious metal has made a high of $1535 today. The upward momentum still looks fairly strong and this means that it is only a matter of time before the price breaks above the $1550 mark. Remember, major central banks cannot leave their addiction of dovish monetary policy and we have seen the evidence of this over in Europe and in the United States. This leads me to believe that the path of least resistance for gold remain skewed to the upside
