Gold falls back to $ 1520 amid resurgent USD demand

Gold pares gains as US dollar index regains poise amid US-China trade woes.
Risk-off market profile helps cushion the downside in Gold.
US Labor Day holiday-led trading could exaggerate Gold’s moves.

Dhwani Mehta FXStreet

Fresh bids emerged just below the 1520 level over the last hour, allowing a tepid recovery in Gold. However, resurgent US dollar demand across the board could keep a lid on the recovery.

US-China new tariffs led risk-off powers the USD

Amid persisting risk-off trades, driven by intensifying disorderly Brexit fears and the new round of tariffs imposed by the US and China on each other’s imports, the safe-haven appeal of the US dollar remains underpinned, in turn weighing negatively on the USD-denominated gold.

Further, in evidence of decreased confidence in gold, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.23% to 878.31 tonnes on Friday.

However, the yellow metal continues to derive support from the softer risk tone induced weakness in the Treasury yields and global equities while upbeat Chinese Caixin Manufacturing PMI data also helps keep the downside limited. Note that China is the world’s top gold consumer.

From a broader perspective, the traditional safe-haven gold will continue to remain in demand amid US-China trade escalation and heightened fears over a global economic downturn.

In the day ahead, the USD price-action will play a key role in gold trades while any fresh developments on the trade front will be closely watched amid light trading.

Gold Technical levels to watch

XAU/USD

Overview
Today last price	1521.4
Today Daily Change	1.10
Today Daily Change %	0.07
Today daily open	1520.3

Trends
Daily SMA20	1509.54
Daily SMA50	1454.17
Daily SMA100	1377.6
Daily SMA200	1332.31

Levels
Previous Daily High	1533.1
Previous Daily Low	1517.38
Previous Weekly High	1554.63
Previous Weekly Low	1517.38
Previous Monthly High	1554.63
Previous Monthly Low	1400.9
Daily Fibonacci 38.2%	1523.38
Daily Fibonacci 61.8%	1527.1
Daily Pivot Point S1	1514.08
Daily Pivot Point S2	1507.86
Daily Pivot Point S3	1498.35
Daily Pivot Point R1	1529.81
Daily Pivot Point R2	1539.32
Daily Pivot Point R3	1545.54

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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