Gold retraces from multi-week low following political headlines
|- Gold refrains from declining further below four-week low.
- News concerning the US, the UK, North Korea and the Middle East grab the spotlight.
- US-China trade sentiment remains upbeat despite latest challenges.
Gold sellers are catching a breath near four-week low as the quote flashes $1488 during early Wednesday.
The bullion recently witnessed downside pressure after the US and Chinese leaders agreed for the much-awaited trade talks, to be held in October. Also weighing on the sentiment is the US Dollar (USD) strength amid a lack of major data and ahead of the expectedly dovish European Central Bank (ECB) meeting.
With this, the US bond yields have rallied to a month’s high while equities also recovered from the latest bottoms, which in turn reduces the safe-haven demand of the yellow metal.
Restricting further declines could be headlines of North Korea’s extended missile tests, despite offering a peace talk to the US, and Iran’s warning to remove the US forces off Afghanistan. Further, Saudi Arabia’s emergency meeting to tackle Israel’s statements, saying the Arab nation has secret nuclear weapons, and the UK-Iran tension also push market players to rethink upon the previous risk-on. Additionally, the US Senate members recently requested President Donald Trump to assure the safety of the US technologies as China can have its access through Hong Kong.
It should also be noted that a lack of major data/events on the economic calendar could have stopped the precious metal sellers, which in turn might prevail for long amid a light data-line scheduled for publishing today. As a result, trade/political headlines will keep being in the spotlight while searching for direction.
Technical Analysis
A 3.5-month old rising trend-line near $1,480 acts as immediate key support holding the gate for further declines to the mid-July top near $1,450. On the contrary, a clear break of 21-day simple moving average (SMA), at 1,517 now, could trigger fresh advances to recent high near $1,560 ahead of highlighting $1,600 for the bulls.
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