Gold refreshes session lows; downside seems limited ahead of Trump-Xi meeting
|- A modest pickup in the US bond yields exerts some pressure on the non-yielding metal.
- The positive mood around equity markets further contributes to the intraday retracement.
- All eyes remain glued to the highly anticipated Trump-Xi meeting at the G20 summit.
Gold finally broke down of its European session consolidation phase and dropped to fresh session lows, around the $1407 region in the last hour.
After an early spike to intraday highs, around the $1424-25 region, the precious metal changed direction and lost some additional ground in reaction to mostly upbeat US macroeconomic releases.
Data released on Friday suggested that the US economy is still on solid grounds, which led to a sudden pickup in the US Treasury bond yields and exerted some fresh pressure on the non-yielding yellow metal.
This coupled with a positive trading sentiment around European/US equity markets further weighed on traditional safe-haven assets and further collaborated to the precious metal's intraday slide of over 1%.
Meanwhile, the US Dollar failed to gain any traction and remained on the defensive, which might turn out to be the only factor lending some support to the dollar-denominated commodity and help limit deeper losses.
The downtick could further be attributed to some repositioning trade ahead of the crucial meeting between the US President Donald Trump and his Chinese counterpart Xi Jinping on the sidelines of G20 summit.
The outcome will influence the broader market risk on Monday and provide a fresh directional impetus, which might lead to a further intraday volatility later on Friday and thus, warrant caution for aggressive traders.
Technical levels to watch
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