Gold Price Analysis: XAU/USD buyers attack $1,760 amid fresh risk-off sentiment
- Gold prices keep the two-day winning streak despite the recent U-turn from $1,760.56.
- Bulls recently cheered the White House Adviser Navaro’s comments defying the US-China trade deal.
- Increasing virus figures from Beijing adds to the risk-off momentum.
- Global PMIs, risk catalysts will keep the driver’s seat.
Gold prices drop to $1,756 during the early Tuesday’s Asian session. The move portrays the bullion’s failure to keep the recent surge towards $1,761. In doing so, the precious metal ignores the challenges to the trading sentiment that crossed wires off-late.
White House Adviser Peter Navarro’s downbeat statements on the Sino-American trade deal initially triggered the risk-off moves. The pessimism got an additional boost by the latest coronavirus (COVID-19) figures from Chinese capital as well as worrisome headlines concerning the dragon nation.
The US policymakers put Chinese media on the list that requires the outlets to obey rules like foreign embassies. The move escalates the US-China tension at a time when the Trump administration isn’t speaking of the trade deal. The reason could be traced from the dragon nation’s latest ban on meat from America’s Tyson.
The increase in Beijing’s COVID-19 figures and grim words of the World Bank President David R. Malpass are some additional burdens on the market’s risk-tone sentiment.
On the contrary, news suggesting likely increased supply of the virus cure by the year-end as well as the US Democrats $1.5 trillion infrastructure plan might restrict the full-on risk aversion wave.
Amid all these catalysts, the US 10-year Treasury yields slip 1.2 basis points to 0.69% whereas Japan’s also drops 0.50% to 22,330 as we write.
Looking forward, the US-China story and the pandemic updates are likely to keep entertaining the market players. Additionally, the preliminary readings of June month PMIs for the key global economies might offer additional clues.
Technical analysis
Unless declining back below the monthly support line, currently around $1,731, buyers keep targeting a break of May month high surrounding $1,765/66 that holds the key to $1,800 threshold.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
