Gold clings to modest gains above $1455 level, lacks follow-through
- A softer risk sentiment underpinned the commodity’s safe-haven demand.
- A subdued USD demand remained supportive of the modest intraday uptick.
Gold edged higher on Thursday and recovered a part of the previous session downfall, albeit lacked any strong follow-through buying.
The recent optimism over a possible US-China trade deal faded rather quickly after the US President Donald Trump signed legislation in support of Hong Kong protestors. Trump also signed another bill, which bans the sale of munitions like tear gas and rubber bullets to Hong Kong police.
Reviving safe-haven demand supportive of the uptick
China responded by saying that it will take firm counter-measures, which was seen derailing the recent progress in trade talks and further complicate efforts to scale back a 16-month long trade war. The latest development weighed on the global risk sentiment and underpinned demand for traditional safe-haven assets, including gold.
The uptick was further supported by news that North Korea fired two projectiles, which were believed to be ballistic missiles. This coupled with a subdued US dollar price action further benefitted the dollar-denominated commodity, though bulls seemed to lack conviction.
Given that the US markets will remain closed on Thursday in observance of Thanksgiving Day, relatively thin liquidity conditions held investors from placing any aggressive bets. Hence, the incoming trade-related headlines might continue to act as an exclusive driver of the commodity's momentum on Thursday.
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.
