Gold manages to hold above $1280 level, focus on US-China trade talks

   “¢   The early uptick led by escalating US-China trade tensions turns out to be rather short-lived.
   “¢   A modest USD uptick exerts some pressure; sliding US bond yields helped limit the downside.
   “¢   The market focus remains glued to the next round of high-level US-China trade negotiations.

Gold surrendered a major part of its early modest gains to the $1286 area  and might now be headed towards the lower end of its daily trading range.

After yesterday’s sharp intraday pull-back from three-week tops, the precious metal regained some positive traction on Thursday and was being supported by the global flight to safety amid the recent escalation of US-China trade tensions.

Despite the prevailing risk-off environment, the uptick lacked any strong conviction, rather met with some fresh supply in wake of a modest US Dollar uptick, which tends to drive flows away from the dollar-denominated commodity.

However, the ongoing sharp decline in the US Treasury bond yields, with the yield on the benchmark 10-year government bond now down over 4bps, extended some support the non-yielding yellow metal and might help limit deeper losses.

Meanwhile, Thursday’s mostly disappointing US macro data – PPI figures for April and initial weekly jobless claims, did little to influence the price action as the market focus remains glued to two-day high-level US-China trade negotiations.

Barring the overnight upswing, the commodity has been oscillating within a broader trading range. Hence, it would be prudent to wait for a sustained move in either direction before positioning for the commodity’s near-term trajectory.

Technical levels to watch