Gold refrains from further declines below 2-week low as traders adjust risk preferences

• Gold sellers catch a breath as risk-on seems to ebb amid fresh trade/political headlines.
• Cautious mode on ahead of the key data/events.

Having slumped more than 2% the previous day, Gold prices are taking a break near two-week low while trading around $1,518 amid initial Asian session on Friday.

The yellow metal had to bear the burden of renewed trade optimism on Thursday after Chinese authorities crossed the wires conveying the US-China trade talks in October. Investors rushed to riskier assets and propelled bond yields following the news as any such development was eagerly awaited since long.

Adding to the bullion’s misery was upbeat ADP Employment Change data from the US indicating a strong print of today’s Nonfarm Payrolls.

Possible reasons for the safe-haven’s latest pullback could be doubts over any breakthrough in the US-China trade talks as stated by Chinese media and also supported by China’s Ambassador to Australia.

Furthermore, Iran’s additional step back from Nuclear Deal and the US Treasury departments’ threats to anyone fueling the Iranian tanker, coupled with cautious sentiment ahead of the key US NFP, also favors a rethink on traders’ risk preferences.

In addition to August month NFP, expected 158K from 164K, the US Federal Reserve Chairman Jerome Powell’s speech in Zurich will also be closely observed for fresh impulse.

Technical Analysis

While a sustained downside break of 21-day exponential moving average (EMA) level of $1,513 can fetch the quote to $1,500 and then to August 13 low near $1,480, buyers can sneak in around a three-month-old rising trend-line, at $1,471. Alternatively, buyers will look for a successful rally above $1,555 to challenge three-week-long ascending trend-line figure of $1,576.