“¢ Fresh US-China trade tensions trigger risk-aversion trade and revive safe-haven demand.
“¢ A modest pickup in the USD demand caps gains for the dollar-denominated commodity.
Gold trimmed some of its early gains to a three-day high near $1209 area, albeit has managed to hold with modest daily gains.
A fresh wave of global risk-aversion trade boosted demand for traditional safe-haven assets and was seen as one of the key factors behind the precious metal’s early up-move.
A report that the US President Donald Trump was preparing to impose additional tariffs on additional $200 billion worth of Chinese imports, as early as next week, resurfaced fears of a full-blown trade war between the world’s two largest economies and weighed on investors’ sentiment.
However, a goodish pickup in the USD demand over the past hour or so kept a lid on any further up-move. In fact, the key US Dollar Index seems to have found decent support near mid-94.00s and now seems to exert some fresh downward pressure on the dollar-denominated commodity.
Barring some second-tier releases, namely – Chicago PMI and revised UoM consumer sentiment index, today’s US economic lacks any major market-moving data and hence, the USD price dynamics might continue to act as a key driver of the commodity’s movement on the last trading day of the week.
Technical levels to watch
A follow-through weakness below the $1200 psychological mark, leading to a subsequent break below overnight swing low level of $1196 is likely to accelerate the slide back towards $1185 horizontal support.
On the upside, the $1208-09 region might continue to act as an immediate hurdle and is followed by resistance near the $1214 area (weekly tops, above which the commodity is likely to head towards $1223-24 supply zone.
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