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  • Persistent US-China trade uncertainty helped regain some traction on Friday.
  • A subdued USD demand also underpinned the dollar-denominated commodity.
  • The upside is likely to remain capped near 100-DMA, around the $1480-82 zone.

Gold edged higher on the last trading day of the week and recovered a part of the previous session’s intraday slide, albeit lacked any strong follow-through traction.
The precious metal extended this week’s pullback from the vicinity of 100-day SMA barrier and witnessed some aggressive selling on Thursday in the wake of some positive trade-related headlines, which dented demand for traditional safe-haven assets.

Focus remains on trade developments

Reports on Thursday indicated that China extended an invitation to the top US trade negotiators for another round of face-to-face talks and that the US may delay tariffs on Chinese goods, slated to go into effect on December 15, regardless of the deal.
The optimism led to a sharp move up in the US Treasury bond yields, which coupled with a modest pickup in the US dollar demand exerted some additional pressure on the dollar-denominated commodity and collaborated to the overnight downfall.
However, the fact that the latest developments came on the back of reports on Wednesday, indicating that the “phase one” trade deal between the world’s two largest economies may not be completed this year, added to the confusion and helped limit the downside.
Given that the US Senate unanimously passed the Hong Kong Humans Right and Democracy Act bill on Tuesday, risk of a further escalation in the US-China tensions extended support to the commodity, rather helped regain some traction on the last day of the week.
Moving ahead, Friday’s US economic docket, featuring the release of flash Manufacturing PMI and University of Michigan Consumer Sentiment Index, will now be looked upon for some short-term trading impetus later during the early North-American session.

Technical levels to watch