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  • The US holiday limits the global market reaction to the latest trade-related news.
  • Rising equities triggered the yellow metal’s pullback from the multi-year high.
  • Global political plays to offer fresh impulse amid a lack of economic data.

With the US markets’ holiday and lack of major data during early-day, the Gold prices remain mostly flat around $1420 ahead of the European markets open on Thursday.

Latest rally at the Wall Street, mainly on the back of expectations favoring further monetary easing, cut short the precious metal’s the safe-haven demand and dragged it back from multi-year high.

The latest noise surrounding the US-China trade truce, namely the Reuters report of scheduled talk during next week and the US criticizing China’s Huawei, as mentioned by the Bloomberg, failed to offer notable moves.

Also, the US President’s warning to Iran that its threats to increase nuclear stocks may “come to bite” was largely ignored.

The US 10-year treasury yields, generally followed to gauge macro risk sentiment, remain on a back foot around the lowest levels since November 2016.

Not only the US off but the absence of key data/events from the rest of the major economies also indicate less market liquidity going forward. However, political plays can keep offering intermediate trade opportunities.

Technical Analysis

FXStreet Analyst, Omkar Godbole, spots a bull flag breakout on an hourly chart confronting the buyer exhaustion on a daily chart to portray the bullion’s struggle. He further mentions:

The safe haven metal spiked to $1,438 levels in the Asian trading hours yesterday only to end the day with moderate losses at $1,419. Essentially, the metal created a candle with a long upper shadow. A similar candle was created on June 25 as well.  As a result, the yellow metal looks set to retest the psychological support of $1,400. That said, a bearish reversal would be confirmed only if the price drops below $1,382, confirming a double top breakdown.