Gold remains on a back foot around $1425 amid mixed market sentiment
|- Likely reductions in the Middle East tensions join strong US Dollar (USD) and mixed expectations from the US-China trade talks to limit Gold moves.
- Second-tier data from the US could also entertain intra-day traders.
Following mixed trade/political clues, Gold traders remain largely sidelined ahead of the key events as the yellow metal trades near $1425 amid initial Asian session on Tuesday.
The US Senate’s failure to override the President Donald Trump’s veto denying the bill to block arms sales to Saudi Arabia and Iran’s open letter expecting help from the UK’s new Prime Minister Boris Johnson seem receding political fears off-late. However, uncertainty surrounding the US-China trade ties ahead of the two-day negotiations in Beijing, coupled with pessimism concerning the US Federal Reserve’s future monetary policy actions and the President Trump’s repeat attack on the Fed keep the safe-havens in demand.
Recent headlines from South China Morning Post (SCMP) emphasize China’s increased imports of the US agricultural products as a goodwill gesture. Contradicting the same is a survey conducted by the Financial Times (FT) that indicates nearly 40% Chinese exporters out of 200 expect a continuation of the trade tension between the world’s two largest economies.
The US Dollar (USD) maintains its recovery on the back of expectations that the Federal Reserve will refrain from a 50 basis point rate cut during this week’s monetary policy meeting.
In addition to the trade headline/political headlines, the US housing, consumer confidence and personal income-spending data could also offer intermediate trading opportunities.
Technical Analysis
While $1438.50/39 area, comprising June 25 high and late-July 18 low, seems an immediate tough upside resistance to watch, a three-week-old ascending trend-line near $1417 can limit the bullion’s near-term declines.
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