- Gold failed to capitalize on the recent recovery move despite trade uncertainty.
- Fed's patience stance seemed to be the only factor weighing on the commodity.
- A subsequent slide, back towards the $1455 region, looks a distinct possibility.
Gold edged lower through the Asian session on Thursday and is currently placed near the lower end of its daily trading range, around the $1470 region.
The safe-haven precious metal witnessed some follow-through selling on Thursday and extended the previous session's late pullback from the vicinity of the 100-day SMA barrier, or near two-week tops, despite uncertainty over a phase one US-China trade deal.
The US President Donald Trump threatened to raise tariffs if phase one of a trade deal is not signed. Tensions between the two countries intensified further after the US Senate unanimously passed the Hong Kong Humans Right and Democracy Act bill on Tuesday.
Adding to this, reports on Wednesday suggested that the US and China may not reach a preliminary trade pact before next year, which shattered hopes of a partial agreement and weighed on the global risk sentiment – evident from weaker tone around equity markets.
Meanwhile, some renewed US dollar weakness also did little to lend any support to the dollar-denominated commodity. The fact that FOMC minutes on Wednesday indicated to keep policy on hold for a while seemed to be the only factor driving flows away from the non-yielding yellow metal.
From a technical perspective, the commodity's inability to capitalize on the recent recovery move from three-month tops and repeated failures near a previous strong support-turned-resistance suggests that the recent bearish pressure might still be far from being over.
Hence, some follow-through weakness, back towards testing weekly lows around the $1455 region, now looks a distinct possibility amid absent relevant market-moving US economic releases on Thursday.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.