“¢ US-China trade tensions/subdued USD demand lend some support.
“¢ Slight improvement in risk sentiment kept a lid on any strong gains.
Gold lacked any firm directional bias and seesawed between tepid gains/minor losses through the early European session on Monday.
The precious metal struggled to capitalize on last week’s goodish recovery move from multi-week lows and remained capped below the $1287-88 supply zone. A combination of diverging forces failed to provide any meaningful impetus and led to a subdued/range-bound price action at the start of a new trading week.
As the US President Donald Trump prepares to meet his Chinese counterpart Xi Jinping at the G-20 meeting next month, the precious metal was seen benefitting as a hedge against the recent escalation in the US-China trade tensions and prospects of a full-blown trade war between the world’s two largest economies.
This coupled with a further US Dollar pullback amid growing bets for a Fed rate cut, further fueled by Friday’s disappointing US durable goods orders and Trump’s criticism over the weekend, provided a minor boost to the dollar-denominated commodity and remained supportive of the early uptick to over one-week tops.
The supporting factors, to a larger extent, were largely offset by a slight improvement in the global risk sentiment, with relatively thin liquidity conditions in wake of a national holiday in the UK and the US, further collaborating towards capping any meaningful gains for the commodity.
Technical levels to watch