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  • Risk-aversion continues to dominate the markets.
  • 10-year US T-bond yield slumps to 5-week lows.
  • US Dollar Index stays calms near mid-97s.

The troy ounce of the precious metal continued to gain value in USD terms on Wednesday with the XAU/USD pair advancing to its highest level since mid-April at $1290.60. As of writing, the pair was up 0.35% on a daily basis at $1289.30.

Concerns over the U.S. and China remain deadlocked in a trade dispute have been weighing on the market sentiment since the start of the week and allowing traditional safe-havens such as the JPY, the U.S. Treasury bonds,  and gold to gather strength. According to a recently published Reuters report, China has backed away from its previous commitments in the trade deal and caused President Trump to tweet out the threat to ram up tariffs at the end of this week.  

Reflecting the sour mood, the 10-year T-bond yield closed the last two days sharply lower and extended its slide on Wednesday, erasing 0.7% on a daily basis on its way to a five-week low of 2.428%. Additionally, the S&P 500 Futures was last seen down 0.63% and suggesting that Wall Street is likely to start the session deep in the negative territory for the third straight day.  

Meanwhile, the greenback stays relatively quiet amid a lack of significant macroeconomic data releases from the U.S. this week and leaves the currency at the mercy of the market’s risk perception. As of writing, the US Dollar Index was virtually unchanged on the day at 97.55.

Technical levels to watch for