Gold retreats from highs, clings to modest gains above $1305
|- Headlines surrounding U.S.-China trade conflict impact the sentiment on Tuesday.
- Wall Street stays in the positive territory.
- US Dollar Index remains on track to close in red for the seventh time in last 8 trading days.
The XAU/USD pair advanced to its highest level in six days at $1310.95 earlier in the session but failed to stretch higher. As of writing, the pair was trading at $1307.50, adding 0.3% on a daily basis.
Major equity indexes in the U.S. came under pressure after the U.S. trade representative said some of the officials saw China "walking back trade offers." Although the initial market reaction weighed on the sentiment and ramped up the demand for safe havens, the latest headlines brought the risk appetite back to markets and forced the precious metal to lose value in USD terms. Reporting on the U.S. - China trade conflict, Dow Jones claimed that the trade talks were in their final stages and China Vice Premiere Liu was expected to visit Washington soon. Following a short lasting dip into the negative territory, stocks rebounded with the Nasdaq Composite and the S&P 500 now adding 0.6% and 0.26% on the day.
On the other hand, the fact that the greenback is struggling to find demand ahead of tomorrow's FOMC meeting helps the pair stay in the positive territory. “They anticipate the median rate expectation for 2019 will fall to one hike, and will be monitoring for any signals about balance sheet policy or what conditions are needed to allow for another hike,” Deutsche Bank analysts said previewing the event.
Key technical levels
The pair could face the initial resistance $1311 (daily high) ahead of $1315 (Mar. 1 high) and $1322 (Feb. 15 high). On the downside, supports are located at $1302 (daily low/20-DMA), $1294 (Mar. 15 low) and $1285 (Mar. 8 low).
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