- Gold prices trade near $1286.50 during early Wednesday.
- Doubts concerning global economic growth favor the yellow metal’s upside but the USD strength and question over China support sellers.
- $1279 acts as immediate support with $1295 being nearby resistance to watch.
Gold trades near $1286.50 on early Wednesday. The yellow metal took a U-turn from six week low during late-Tuesday as comments from Fed policymakers questioned future rate-hikes. However, early-day strength of the US Dollar, likely backed by downbeat catalysts from the Australia and doubts over soft Brexit, confined the safe-havens upside.
Tuesday’s better than forecast prints of the US data couldn’t hold the Gold down for long as comments from the Minneapolis Federal Reserve President Neel Kashkari and Boston Fed President Eric Rosengren raised questions on the Fed’s future rate-hike trajectory. During their separate public appearances, the Fed policymakers added strength to the present ‘patience’ call for the rate-hikes as Rosengren said risks from macro events like Brexit, trade talks are looming large whereas Kashkari said that the U.S. economy is not at full employment.
Gains past-Fed leaders’ comments couldn’t last long as the US Dollar regained market attention after sluggish prints of the Australian GDP and speculations for rate-cuts from the Reserve Bank of Australia (RBA) diverted traders to the US Dollar in search of safety.
Adding to the USD strength was EU-UK leaders’ inability to reach a Brexit deal and positive developments at the US-China trade negotiation front. It should also be noted that recent weakness in Chinese data-points and their central bank’s forecast of slow growth can be considered as an additional lag for Gold as China is among top buyers of the precious metal.
While market rush for the greenback and weakness at China confined Gold’s upside, bulls didn’t leave the ground unguarded as pessimism surrounding global economic growth continued supporting the yellow metal for its risk-safety.
Gold Technical Analysis
Prices may find $1279 and $1276 as immediate supports ahead of testing 100-day simple moving average (SMA) near $1265.70.
Alternatively, $1295 and $1303 could check buyers’ strength before pleasing them with $1313.