Gold Price Analysis: XAU/USD consolidates the bounce around $2030 amid US-China woes

• Gold cheers fresh US-China tensions, dollar gains to cap the upside?
• Markets turn risk-averse after China’s likely sanctions on US officials.
• US-China updated eyed ahead of the Wall Street open.

Following the recovery from daily lows of $2019, Gold (XAU/USD) continues to probe the upside, keeping its range around $2030.

The sentiment around the yellow metal remains underpinned amid fresh US-China tensions over the Hong Kong issue. The latest Bloomberg report cited that China is set to impose sanctions on the US officials in a tit-for-tat response to the American sanctions on the Hong Kong leader Carrie Lam and other top officials on Sunday.

However, the upside attempts in gold remain capped by the dollar gains, as the USD bulls continue to cheer the better-than-expected US NFP data. Markets also prefer to hold onto the world’s reserve currency, the US dollar, ahead of the scheduled trade talks between the US and China this Saturday.

The ongoing spat between the world’s two biggest economies over several issues, including the tech war, Hong Kong and Taiwan, could likely jeopardize the trade deal. These concerns continue to bode well for the safe-haven US dollar, which keeps the corrective downside intact for the precious metal.

Also, limiting the recovery in gold, speculators reduced their bullish positions in COMEX gold and silver contracts in the week to Aug. 4, per CFTC data. Attention now remains on the developments around the US-China conflict amid a light US docket while traders also look forward to the cues on the Wall Street open.

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