Gold prices staged a rebound late on Wednesday, which has been carried through tino the session on Thursday. Markets are looking to hedge against risk, following the threats from Trump of incoming Chinese sanctions.
Overnight, China’s parliament approved a decision to move forward with national security legislation for Hong Kong. China detailed that the legislation is aimed at tackling; secession, subversion, terrorism and foreign interference in the city but the plan, which have triggered big protests in Hong Kong.
Tensions between the two superpowers, the US and China have been high over China’s claims in the South China Sea and trade.
U.S. President Donald Trump did earlier in the week indicate that the United States was working on a strong response to China's planned national security legislation for Hong Kong, which would be announced before the end of the week.
What does this mean for the markets?
Gold (XAU/USD) has already staged a strong rebound, after coming under some selling pressure earlier in the week. At the time of writing, some of the riskier FX is still surprisingly holding ground versus the USD. However, markets do appear to be awaiting Trump’s response, hence the pumping of Gold to hedge risk. Depending on the severity, this could very well trigger a big bout of safe-haven flows back into; USD, JPY and further moves higher for Gold.
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