- Thursday’s post-ECB strong intraday upsurge fizzles out rather quickly.
- US-China trade optimism continues to dent the metal’s safe-haven status.
- Weaker USD helped regain some traction ahead of US retail sales data.
Gold reversed an early dip and jumped back above the key $1500 psychological mark in the last hour, albeit remained well below the previous session's volatility swing high to weekly tops.
The precious metal on Thursday rallied hard to an intraday high level of $1524 in reaction to the European Central Bank’s (ECB) decisions to lower interest rates further into negative territory and reintroduce QE program, putting further pressure on the Fed to take similar dovish action at its next policy meeting on September 17-18.
This was followed by the US President Donald Trump's latest criticism, accusing the Fed for not doing enough to support the US economy and asking the central bank to cut rates to zero or below, which eventually turned out to be one of the key factors that provided a strong boost to the non-yielding yellow metal.
Weighed down by positive trade headlines
However, the strong intraday upsurge quickly ran out of the steam amid encouraging signs that the US and China were narrowing their differences over trade, which continued dampening demand for traditional safe-haven assets - like Gold - and prompted some aggressive intraday selling at higher levels.
In the latest trade-related developments, China was said to narrow the scope for upcoming trade negotiations in early October in hopes to resolve some key issues and break the deadlock. Additional reports suggest that the Trump administration might offer a limited trade agreement to China that would delay and even roll back some US tariffs.
The positive news flow continued pushing the US Treasury bond yields higher across the board and exerted some additional downward pressure during the Asian session on Friday, though a follow-through US Dollar pullback underpinned demand for the dollar-denominated commodity and helped regain some positive traction.
Market participants now look forward to Friday's US economic docket - highlighting the release of monthly retail sales data - to grab some short-term trading opportunities on Friday. The key focus, however, will remain on the upcoming FOMC meeting, which should help determine Gold's near-term trajectory.
Technical levels to watch
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