The gold price is on track today to rack up its 6th straight day of gains but the rally may be about to end after speculation rose that US President Donald Trump and Chinese President Xi Jinping were close to resolving their differences on a trade deal between the US and China.
Gold has benefited in recent weeks as doubt was cast over the willingness of both parties to reach a compromise and although there seems to be some sort of agreement made, some analysts are saying to be wary of any rumors as this is a common occurrence and any hopes deal has the potential to fall over
"If there is real progress on the trade talks, that could hurt gold because that better outlook would mean the (U.S. Federal Reserve's) accommodative stance will not come into play," said Michael McCarthy, chief markets strategist at CMC Markets
"There would be concerns with the gold bulls in that scenario, but markets generally have become a little weary about responding to announcements from the White House. Too many have proved to be contradicted in the near future," he added.
The next big test for gold is later today with the release of the Non Farm payrolls figure and unemployment rate from the US which comes on the back of a dovish speech from the Fed earlier in the week which lead analysts to believe that the central bank may be nearing the end of their rate hiking cycle.
If we see some good numbers out today form the US, we may see gold take a hit as the Fed may be forced to continue with their rate hiking cycle this year to contain inflation, even if they had other ideas.
A disappointing figure will see gold remain well supported and may be the catalyst for a move higher.