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Gold remains below $1500 as US-China goodwill regains market attention

  • ECB and US CPI offered a volatile day to gold traders.
  • US-China trade optimism regains market attention off-late.
  • US consumer-centric data, trade/political headlines will be in the spotlight.

Following the ECB decision and US CPI-led crazy Thursday, Gold prices stays on the back foot while taking rounds to $1,498 during Friday’s Asian session.

The yellow metal turned wild with the European Central Bank’s (ECB) deposit rate cut and quantitative easing (QE) measures while upbeat prints of the US Core Consumer Price Index (CPI) added fuel to the volatile session the previous day.

However, markets shifted their attention back to the US-China goodwill gestures that have been limiting the safe-haven demand off-late. Among the baby-steps, delayed tariffs from the US, readiness to buy more of the US agricultural products by China, and upbeat statements from the US President Donald Trump and Treasury Secretary Steve Mnuchin gained major attention.

Sellers might also have emphasized the US President Trump’s comments that he is considering North Korea and Iran’s proposal to talk, which in turn could recede the geopolitical tension.

Moving on, August month data of the US Retail Sales and Michigan Consumer Sentiment Index for September will be the key for the bullion traders while also keeping an eye over macro headlines.

Technical Analysis

FXStreet Analyst, Ross J Burland, spots pin bar on the daily chart as a bearish signal while saying:

The 21-day moving average was pierced but only momentarily and there has been a bearish pin bar left on the daily  chart, signaling further downside to follow.  Indeed, the price remains below the  23.6% Fibonacci (Fibo) retracement of the July lows to recent swing highs as well as trading below the psychological 1500 handle. Below the 1,480 target, 1,478 comes as the 13 August  volatility  spike low which guards the 19 July swing highs at 1,452.93. Bulls will need to get back above 1,550 which then guards prospects for 1,590 as the 127.2% Fibo target area.  

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