- A sudden turnaround in the global risk sentiment prompted some fresh selling.
- Bloomberg reports that the US and China are moving closer to a trade deal.
- The downside remains limited, at least for now, ahead of the US macro data.
Gold drifted into negative territory during the early European session and refreshed daily lows, around the $1475 region in the last hour.
The precious metal failed to capitalize on its early uptick to over one-month tops and once again started retreating from the 100-day SMA support-turned-resistance. A sudden turnaround in the global risk sentiment, triggered by positive trade-related headlines, was seen as one of the key factors weighing on the safe-haven commodity.
Weighed down by the latest trade optimism
Despite escalating tensions over the passage of Hong Kong and Xinjiang bills, a Bloomberg report indicated that the US and China are moving closer to a deal before the 15 December tariffs deadline. The report further added that the agreement would also include the amount of tariffs that would be rolled back in a phase-one trade deal.
A shift in the market mood, coupled with a goodish intraday pickup in the US Treasury bond yields collaborated towards driving flows away from the non-yielding yellow metal. Adding to this, a modest uptick in the US Treasury bond yields also played its part in exerting some downward pressure on the dollar-denominated commodity.
However, the latest optimism might turn out to be short-lived, given that the US President Donald Trump indicated on Tuesday that a trade deal with China may not come until after the 2020 US presidential election, which might eventually help limit the downside, at least for the time being.
Moving ahead, market participants now look forward to the US economic docket, featuring the release of ADP report and ISM Non-Manufacturing PMI, which might influence the USD price dynamics and produce some short-term trading opportunities later during the early North-American session.
Technical levels to watch
Share
