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  • Gold prices hold onto recovery gains from $1,760.85 to refresh intraday high.
  • Brussels reacts to the US tariff threats, Sino-American trade tension prevails.
  • IMF again cuts global growth forecasts, coronavirus wave 2.0 brewing in the US.

Gold takes the bids near $1,766 during Thursday’s Asian session. The yellow metal recently bounced off $1,760.85 following concerns suggesting escalations in the global trade wars. Additionally increasing the safe-haven demand of the metal could be the worsening of the coronavirus (COVID-19) conditions in the US and grim comments from the International Monetary Fund (IMF).

In the latest sign of the trade tension, the European Union (EU) considers the US threats to levy tariffs on the bloc’s $3.1 billion worth of goods as ‘very damaging’, per the Financial Times (FT). Also in the line are the comments from White House adviser Peter Navarro and the US Federal Bureau of Investigation (FBI) Director Christopher Wray about China. Early on Wednesday, the US ordered anti-dumping investigations onto the Asian tire exporters.

On the other hand, record numbers of the fresh COVID-19 cases in the US, as per the CGTN, above 36,000 justify fears of another wave in the deadly virus in the world’s largest economy. Also keeping the risk-tone sentiment heavy are the recent pandemic updates from Australia and China. It should also be noted that the IMF downgraded its global GDP forecasts from -3.0% in April to -4.9% for 2020 offers an extra burden on the market mood.

Amid all these catalysts, the US 10-year Treasury yields drop to 0.674% whereas stocks in Japan and Australia are also downbeat as we write. It’s worth mentioning that markets in China and Hong Kong are off today.

Looking forward, a lack of major data/events on the calendar will highlight the trade/virus updates for near-term direction. Given the escalation in the market’s risk-off mood, only a strong positive might defy the rush to risk-safety.

Technical analysis

In addition to the early-month tops near $1,745/44, an ascending trend line from June 05 at $1,742 also becomes the key downside levels to watch during the quote’s declines below $1,754. Until then, $1,780 and $1,796 could lure the bulls towards challenging the $1,800 threshold.