Gold: Doji on D1 questions bulls amid mixed trade sentiment

• Gold fails to extend the latest recovery as mixed headlines concerning the US-China phase on deal question markets.
• US House of Representatives’ support for Hong Kong Bill flares up the trade tension.
• A bearish candlestick formation joins mildly positive catalysts for the US dollar (USD), which in turn can pull the bullion downwards.

Although the United States’ (US) support for Hong Kong protesters favors the broad risk-off momentum, the mixed response from Chinese diplomats and a bearish candlestick formation question Gold buyers around $1,473 during early Thursday.

Following the Senate’s approval for Hong Kong Human Rights Bill, the House of Representatives also marked its assent on the proposal that could activate regular reviews of Hong Kong’s special financial status and bar exports of many crowd control munitions to the Hong Kong police. The bill is yet to be signed by US President Donald Trump, who is widely expected to confirm his previous support for the Asian nation to exert additional pressure on China.

Even so, China’s Vice-Premier and Chief trade negotiator Liu He said he is “cautiously optimistic” about reaching a phase one trade deal, as conveyed by Bloomberg. Alternatively, China’s Think Tank keeps the risk-off alive while saying that  the Hong Kong issue is definitely a negative factor in the US-China trade talks.

As a result, the US 10-year treasury yields seesaw around 1.73% while S&P 500 Futures stay negative around 3,100.

That said, the recent minute statement concerning the Federal Open Market Committee (FOMC) reiterated its static bias towards the present monetary policy, which in turn failed to impress the USD buyers. However, the greenback has recently been the market’s favorite due to its safe-haven allure.

Moving on, trade/political headlines will keep the driver’s seat while second-tier manufacturing and housing data from the US could offer intermediate moves.

Technical Analysis

Given the pair’s formation of a Doji candlestick on the daily (D1) chart, prices are likely to extend the latest pullback towards a monthly low near $1,445. However, an upside clearance of 100-day Simple Moving Average (SMA) level of $1,481/82 could propel prices to $1,500.