Gold pulls away from multi-week highs on trade hopes, steadies below $1,470
|- Upbeat market mood weighs on gold on Thursday.
- US Dollar Index rebounds to 97.50 area on surging T-bond yields.
- Markets' focus remains on developments surrounding US-China trade dispute.
After advancing to its highest level since November 7th at $1,487 amid broad-based USD weakness, the troy ounce of the precious metal reversed its direction and slumped below $1,470 during the American trading hours. As of writing, the XAU/USD pair was $1,467.80, erasing 0.5%, or $7, on a daily basis.
The sharp upsurge witnessed in the EUR/USD pair during European Central Bank President Lagarde's first press conference triggered a USD selloff and helped the pair gain traction. However, the improving market sentiment in the second half of the day made it difficult for safe-haven gold to find demand.
Risk appetite returns on latest trade headlines
US President Donald Trump on Thursday tweeted out they were getting very close to a big trade deal with China to help risk-on flows dominate the markets. Furthermore, the Wall Street Journal reported that the US was planning to offer a 50% reduction on $360 billion worth of Chinese goods as part of the phase-one trade deal and provided an additional boost to risk appetite.
According to Bloomberg, Trump will be meeting his trade advisers at 19:30 GMT on Thursday to discuss the trade negotiations with China and markets will ve paying close attention to headlines coming out of this meeting.
Reflecting the upbeat market mood, the 10-year US Treasury bond yield is now up 5.2% on the day and Wall Street's three main indexes are adding between 0.4% and 0.5%.
In the meantime, surging bond yields helped the greenback gather strength following Wednesday's FOMC-inspired selloff and allowed the bearish pressure to remain intact. At the moment, the US Dollar Index is up 0.37% on the day at 97.50.
Technical levels to watch for
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