Gold adds to Thursday’s steep decline, hits fresh 2-week lows
- The latest US-China trade optimism continues to weigh on the commodity’s safe-haven status.
- A subdued USD price action does little to impress bulls ahead of US jobs report/Powell’s speech.
Gold dropped to fresh two-week lows during the early European session on Friday, albeit has still managed to hold above the key $1500 psychological mark.
Spot prices edged lower for the second consecutive session on Friday and added to the previous session's heavy losses amid the prevailing risk-on mood, which tends to weigh on traditional safe-haven assets - like Gold. Risk appetite revived after China confirmed that officials from Beijing and Washington have agreed to resume trade negotiations in early October.
Remains depressed as focus shifts to NFP/Powell’s speech
Fading safe-haven demand was evident from a strong intraday upsurge in the US Treasury bond yields, which accelerated further following the release of stronger-than-expected economic data from the US - ADP report on private-sector employment and ISM non-manufacturing PMI - and helped ease the recent bearish pressure surrounding the US Dollar.
Meanwhile, the greenback failed to capitalize on the overnight uptick but the fact that Thursday's upbeat US data might have tempered expectations of an aggressive policy easing by the Fed at its upcoming meeting in September continued weighing on the non-yielding commodity and contributed to the weaker tone on the last trading day of the week.
The downside, however, seemed cushioned, at least for the time being, as investors now look forward to Friday's key release of the closely watched US monthly jobs report - popularly known as NFP. This coupled with the Fed Chair Jerome Powell's scheduled speech might play a key role in determining the commodity's next leg of a directional move.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
