- Trade negative news and weak data favor risk-off sentiment.
- Greenback strength confines upside.
With the US Dollar (USD) strength restricting Gold from safe-haven benefits, the bullion is taking the rounds near $1280 during the early Asian session on Wednesday.
Comments indicating higher tariffs on Chinese goods by the US President Donald Trump initially triggered risk-off sentiment around late-Tuesday.
The mood stretched overnight after Chinese daily points the dragon nation’s ability to fight against the US with its rare earth metal stocks, the same was also suggested by various lawmakers from the world’s second-largest economy.
Additionally, the latest weakness in the US Dallas Fed manufacturing index and Bloomberg expecting soft economic growth from China also added to the risk aversion.
However, greenback’s risk-safety nature capped the yellow metal’s gains.
Investors may now keep their eyes on the US-China headlines as fewer data are up for release on the economic calendar.
Technical Analysis
While 200-day simple moving average (SMA) levels near $1297 seem restricting near-term upside, $1260 comprising 100-day SMA acts as important downside support for the metal. Also, $1310 and $1267 are extra numbers that traders may observe for further guidance.
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