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Gold remains on track to end week below $1,500

  • Risk-on flows continue to weigh on the precious metal.
  • Retail sales in the US rose more than expected in August.
  • US Dollar Index recovered from lows on upbeat data.

The troy ounce of the precious metal rose above $1,500 but failed to preserve its strength as the upbeat market sentiment made it difficult for the safe-haven gold to find demand. The XAU/USD pair slumped to a daily low of $1,488 during the American trading hours and now seems to have settled a little above the $1,490 handle. Unless it rebounds above the $1,508 mark in the remainder of the day, the pair will close in the negative territory on the weekly chart for the third straight week.

Easing trade worries bring back risk appetite

Earlier today,  China’s State Council said that they will be excluding  some agricultural products including soybeans and pork from retaliatory  tariffs on US imports, which is seen as a sign of further easing the US-China tensions ahead of next month’s critical high-level negotiations in Washington.

Furthermore, regarding reports claiming that his administration was considering the option of offering an interim trade deal that includes a delay to China tariffs in exchange for agricultural purchases, US President  Donald Trump said that he’d prefer to have a complete deal with China.

Boosted by the risk-on flows, the 10-year US Treasury bond yield extended its rally and was last up nearly 6% on the day, aiming to post a weekly gain of nearly 20%.

Meanwhile, despite the decisive upsurge witnessed in the US T-bond yields, the US Dollar Index (DXY) struggled to gain traction as the Greenback weakened against its major European rivals. Although today’s data from the US showed that retail sales in August increased by 0.4% to beat the market expectation of 0.2% and helped the DXY rebound from its lows, the index is still down 0.15% on the day at 98.20, helping the pair limiting its losses.

Technical levels to watch for


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