Gold sidelined near $1285 level, trade-related headlines remain in focus
Our preference: long positions above 1280.25 with targets at 1286.50 & 1290.00 in extension.Alternative scenario: below 1280.25 look for further downside with 1276.50 & 1274.00 as targets.
• Optimism over US-China trade talks weighs on traditional safe-haven assets.
• The positive tone around the US bond yields further collaborates towards capping.
• A subdued USD demand turns out to be the only factor lending some support.
Gold struggled to build on the overnight goodish up-move from closer to two-week lows and seesawed between tepid gains/minor losses through the early European session on Wednesday.Against the backdrop of growing concerns over slowing global growth, resurfacing trade tensions further dampened investors’ risk-appetite and boosted the precious metal’s traditional safe-haven status on Tuesday.
News reports on Tuesday suggested that the US has turned down an offer of a preparatory trade meeting with Chinese counterparts due to outstanding disagreements over the enforcement of intellectual property rules.
However, a combination of diverging factors failed to provide any fresh
impetus and kept a lid on any follow-through up-move for the commodity, leading to a subdued/range-bound price action.
White House economic advisor Larry Kudlow denied the report about the US cancelling a trade planning,
which coupled with an uptick in the US Treasury bond yields dampened demand for the non-yielding yellow-metal.
Meanwhile, the US Dollar failed to preserve/build on the overnight uptick and
turned out to be the only factor lending some support/limiting any meaningful downside for the dollar-denominated commodity.
In absence of any major market moving economic releases from the US,
broader market risk sentiment and the USD price dynamics might
continue to act as key determinants of the commodity’s move on Wednesday.