- A strong pickup in the USD demand exerted some downward pressure on Wednesday.
- The prevalent cautious mood continued lending support and helped limit the downside.
Gold edged lower through the mid-European session on Wednesday and is currently placed at the lower end of its daily trading range, just above $1525 level.
As investors digested the overnight reports, suggesting that an impeachment inquiry will be started against the US President Donald Trump, encouraging trade-related development helped the US Dollar to regain strong positive traction on Wednesday and turned out to be one of the key factors exerting some downward pressure on the dollar-denominated commodity – Gold.
Cautious mood partly offset stronger USD
It is worth reporting that China is planning to buy more US farm products as a goodwill gesture ahead of the upcoming high-level trade talks in early-October. This comes on the back of the recent move by the US to exempt $250 billion worth of Chinese goods from a 25% tariff and raised optimism over a possible resolution of the prolonged US-China trade disputes.
Adding to this, a goodish pickup in the US Treasury bond yields further exerted some downward pressure on the non-yielding yellow metal, though the prevalent cautious mood around equity markets underpinned the precious metal’s perceived safe-haven status and might continue to help limit any meaningful downfall, at least for the time being.
In absence of any major market-moving economic releases from the US, the broader market risk sentiment and the USD price dynamics might continue to act as key determinants of the commodity’s momentum through Wednesday’s tr
ading session.
Technical levels to watch
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