Gold drops to five-day lows near $1,490 as markets start pricing a US-China trade deal
|- China is reportedly ready to make a partial trade deal with the United States (US).
- Wall Street's main indexes cling to daily gains.
- US Dollar Index fails to break above the 99 mark.
The XAU/USD pair fluctuated in a relatively tight range near the $1,500 mark throughout the day before coming under strong bearish pressure and slumping to a fresh five-day low of $1,488 in the last hour.
Reports of China looking to make a trade deal with the United States (US) on parts of the negotiations both sides agree upon and to present a timetable to solve the harder issues next year provided a boost to the market sentiment and the safe-have gold struggled to find demand. As of writing, the pair was trading near $1,492, down 0.85% on a daily basis.
The 10-year US Treasury bond yield extended its rebound and is now looking to finish the day with a gain of more than 1%. Additionally, Wall Street's three main indexes, which started the day in the negative territory, are now back in the positive territory to reflect the upbeat mood.
On the other hand, the initial market reaction to this development lifted the US Dollar Index a tad above the 99 mark to further weigh on the pair. However, the index seems to have lost its momentum and is now up only 0.08% on the day at 98.92, allowing the pair to recover a small portion of its losses.
There won't be any macroeconomic data releases from the US in the remainder of the day and the market's risk perception is likely to continue to drive the pair's action.
Technical levels to watch for
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