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FxWirePro: Gold likely to test previous high around $1370 area

The yellow metal is benefiting from the recent uncertainties surrounding global politics and trade. It is far from clear, what would be United States approach in the global geopolitical arena under the Trump presidency, who in many ways has taken a hard stance towards traditional alliances, while looking to mend relationships with another geopolitical superpower, Russia. On the trade front, the US treasury secretary Steven Mnuchin cleared at the G20 finance ministers’ meeting that the United States would be taking a whole new set of approaches to reduce the global imbalances, in another word, reduce deficits of the United States. The financial market fears that these new approaches might trigger trade wars between nations.

As these uncertainties push the US dollar down against most of its key trading counterparts, gold has moved higher by more than $100, from its bottom around $1120 per troy ounce in last December. The gold price is currently trading at $1246 per troy ounce and we expect the gold price to jump by another $100 dollar per troy ounce and test the highs made in last July around $1370 per troy ounce.

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