- Gold prices carry bounce off $1,901.52, the lowest in two weeks.
- US dollar gains, mixed sentiment triggered the bullion’s biggest daily slump since April 2013.
- Risk catalysts to keep the driver’s seat ahead of the US CPI data.
Gold picks up the bids near $1,926.70 during the pre-Tokyo Asian session on Wednesday. The bullion dropped by around $120 the previous day, marking the biggest drop since late-April 2013, amid market’s rush to the US dollar. Though, the recent risk reset seems to have favored the pullback moves.
Consolidation or a trend change?
Although challenges to the US-China relations and uncertainty surrounding the American stimulus stay on the table, the market’s profit booking from gold’s magnanimous surge is less likely to defy the bulls unless any positive headlines.
Recently, Fox Business News (FBN) cited the US House Republican Leader Mitch McConnell to suggest no coronavirus (COVID-19) relief talks by the policymakers could be undertaken on Tuesday. On the other hand, the White House Adviser Larry Kudlow’s statement that China is fulfilling trade obligations can’t justify the Trump administration’s executive orders sanctioning officials from Beijing and the moves to term goods from Hong Kong as “Made in China”. It should also be noted US President Donald Trump also said that phase one deal with China means “very little” to him. Further, the Republican leader’s rhetoric to rekindle vaccine hopes also fails to convince the market optimists.
The reason could be traced from the fresh coronavirus (COVID-19) case in New Zealand and a sustained, but the recently slow, rise in the news cases in Australia and the US.
Against this backdrop, S&P 500 Futures follow Wall Street’s footsteps while declining to 3,333, down 0.07% on a day.
Looking forward, traders will keep eyes on the risk catalysts wherein the US stimulus talks and Sino-American news may join virus updates to occupy the front rows. Additionally, the US Consumer Price Index (CPI) for July, expected to rise from 0.6% to 0.8% on YoY, will also be the key to watch.
Technical analysis
An ascending trend line from March, at $1,867 now, restricts the yellow metal’s downside past-$1,900 nearby support. However, the bulls are less likely to regain controls unless the quote rises past-$2,000 mark.
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

AUD/USD holds below 0.6400 amid signs of easing US-China tensions
The AUD/USD pair trades in negative territory near 0.6390 during the early Asian session on Monday. The US Dollar edges higher against the Aussie amid signs of easing US-China tensions. China will hold a press conference about policies and measures on stabilizing employment and ensuring stable growth on Monday, which will be closely watched by traders.

USD/JPY holds steady above mid-143.00s amid Trump's uncertainty
USD/JPY kicks off the week on a subdued note and consolidates above mid-143.00s amid mixed cues. Investors push back expectations for an immediate BoJ rate hike amid rising economic risks from US tariffs, which acts as a headwind for the JPY and lends support to the pair amid a modest USD uptick.

Gold edges lower to near $3,300 as US-China trade tensions ease
Gold price loses ground to near $3,310 in Monday’s early Asian session, down 0.30% on the day. De-escalating trade tensions between the US and China underpins the Gold price. The fears of the US recession might help limit the Gold’s losses.

Week ahead: US GDP, inflation and jobs in focus amid tariff mess
Barrage of US data to shed light on US economy as tariff war heats up. GDP, PCE inflation and nonfarm payrolls reports to headline the week. Bank of Japan to hold rates but may downgrade growth outlook. Eurozone and Australian CPI also on the agenda, Canadians go to the polls.

Week ahead: US GDP, inflation and jobs in focus amid tariff mess – BoJ meets
Barrage of US data to shed light on US economy as tariff war heats up. GDP, PCE inflation and nonfarm payrolls reports to headline the week. Bank of Japan to hold rates but may downgrade growth outlook. Eurozone and Australian CPI also on the agenda, Canadians go to the polls.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.