“¢ A modest USD retracement/risk-off mood extends some support.
“¢ Fed rate hike expectations keep a lid on any meaningful up-move.
Gold struggled for a firm direction at the start of a new trading week and seesawed between tepid gains/minor losses through the early European session.
After last week’s repeated failures to build on/sustain above the key $1200 psychological mark, a combination of diverging forces failed to provide any meaningful impetus and led to a range-bound/subdued price action on Monday.
A mildly softer tone around the US Dollar was further seen benefitting dollar-denominated commodities – like gold. Adding to this, escalating US-China trade tensions kept investors on edge and extended some additional support to the precious metal’s safe-haven appeal.
The US President Donald Trump threatened to impose tariffs on additional $267 billion Chinese products, over and above the already promised duties on $200 billion worth of Chinese imports and kept fueling market concerns over a full-blown trade war between the world’s two largest economies.
The positive factors, however, were largely offset by firming Fed rate hike expectations, which eventually kept a lid on any meaningful up-move for the non-yielding yellow metal. Friday’s upbeat US monthly jobs report, especially the wage growth data, reaffirmed market expectations that the Fed remains on track to raise interest rates in September and a further increase in December also remains a distinct possibility.
Technical levels to watch
Immediate resistance is pegged near the $1200 handle and is followed by the $1206-07 supply zone. On the flip side, sustained weakness below $1190 immediate support now seems to open the room for further downfall towards $1186 horizontal zone en-route $1183-82 support area.
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