- Reemerging US-China trade tensions extended some support.
- A subdued USD demand further underpinned the commodity.
- The upside remains capped ahead of US monthly retail sales.
Gold lacked any firm directional bias and seesawed between tepid gains/minor losses through the early European session on Wednesday.
Following the previous session’s intraday pullback, the precious metal managed to find some support amid reviving safe-haven demand on the back of fresh trade tensions between the world’s two largest economies. China now reportedly wants the US to roll back tariffs before agreeing to buy $50 billion of American agricultural products under the recent partial trade deal agreed last week.
Bulls lacked strong conviction
Adding to this, China criticized the new US legislation, which provides sanctions against officials responsible for undermining fundamental freedoms and autonomy in Hong Kong. China also vowed to take countermeasures against the US, which further dampened prospects for an immediate resolution of the prolong US-China trade disputes and prompted some safe-haven buying.
Meanwhile, a subdued US Dollar demand further underpinned the dollar-denominated commodity and remained supportive. The ongoing fall in the US Treasury bond yields, amid expectations that the Fed will cut interest rates again in October, kept the USD bulls on the defensive, though did little to provide any meaningful bullish impetus to the non-yielding yellow metal.
Hence, it will be prudent to wait for a strong buying interest before traders start positioning for any near-term appreciating move. In the meantime, Wednesday’s US economic docket – highlighting the release of monthly retail sales data – will now be looked upon for some short-term trading impetus later during the early North-American session.
Technical levels to watch
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