- Gold managed to attract some dip-buying amid worries about escalating US-China tensions.
- US commerce secretary Wilbur Ross confirmed the move to blacklist China’s chipmaker SMIC.
- The upbeat market mood and a modest USD uptick might keep a lid on any strong move up.
Gold reversed an intraday dip to the $1877 area and refreshed daily tops during the mid-European session. The commodity was last seen trading near the $1887-88 region, well within the striking distance of one-month tops touched on Thursday.
The latest leg of a sudden spike over the past hour or so followed comments by the US commerce secretary, Wilbur Ross, confirming that the US has moved to blacklist China’s top chipmaker SMIC. The decision fueled worries about a further escalation in tensions between the world’s two largest economies, which, in turn, provided a modest lift to the safe-haven XAU/USD.
The precious metal was further supported by the fact that Britain and the European Union have struck a downbeat tone about the likelihood of a post-Brexit trade deal. That said, the underlying upbeat market mood – amid the optimism over COVID-19 vaccine rollouts – and a modest US dollar uptick might keep a lid on any meaningful upside for the dollar-denominated commodity.
There isn’t any major market-moving economic data due for release from the US on Friday. This further makes it prudent to wait for some follow-through buying beyond the overnight swing highs and the $1900 mark before placing fresh bullish bets. Nevertheless, the XAU/USD remains on track to end with strong weekly gains as the focus remains on progress towards additional US fiscal stimulus.
Technical levels to watch
Share
