“¢ Fails to benefit from escalating US-China trade tensions.
“¢ A modest USD rebound exerts some fresh downward pressure.
“¢ Positive European equities do little to revive safe-haven demand.
Gold struggled to build on overnight up-move and traded with a mild negative bias through the early European session on Tuesday.
Spot prices inched lower and failed to benefit from escalating trade tensions between the world’s two largest economies, especially after the latest US tariffs on around $200 billion worth of Chinese goods.
Currently, at 10%, the tariffs would rise to 25% in January 2019 and the US President Donald Trump has warned to pursue tariffs on $267 billion of additional imports if China takes retaliatory action.
Meanwhile, a combination of negative forces kept a lid on any meaningful up-move and exerted some fresh downward pressure on the commodity. The impending Fed rate hike was seen as one of the key factors weighing on the non-yielding yellow metal.
Adding to this, a modest US Dollar rebound further dented demand for the dollar-denominated commodity, with a positive opening across European bourses also doing little to revive the precious metal’s safe-haven demand.
Currently trading just below the key $1200 psychological mark, the commodity remains confined within a broader trading range held over the past three weeks and seemed to wait for a fresh catalyst before the next leg of a directional move.
Technical levels to watch
Immediate resistance is pegged near the $1204 area and is followed by the $1208-09 region, above which the metal is likely to aim towards testing the $1214-15 supply zone.
On the flip side, the $1193 level might continue to protect the immediate downside, which if broken is likely to accelerate the fall further towards $1188 intermediate support en-route the $1183 region.
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