Gold Price Analysis: XAU/USD slips below $1,700 amid a quiet session
- Gold prices pullback from $1,701.20 during the early-Asian session retracement.
- Tensions between North Korea and South Korea escalate, China flex muscles against Australia, India.
- Global markets portray risk-on sentiment despite a light calendar.
Gold prices drop to $1,698, intraday low of $1,696.34, during the initial Asian session on Tuesday. The yellow metal bounced off the five-week low the previous day amid broad US dollar weakness. Though, the recent consolidation in the global markets seems to probe the precious metal’s recovery moves.
On Monday, global markets portrayed heavy risk-on sentiment while extending late-Friday optimism backed by the US employment data. The upbeat mood was also supported by weekend trade numbers from China as well as receding protests in the US.
As a result, the market’s rush to the US dollar in search of risk-safety pulled the chains, which in turn favored the commodities at the week’s start.
Even so, the US-China tussle remains on the card with the Trump administration moving closer to a bill to sanction diplomats from Beijing for human rights violations in Xinjiang.
Also citing the market risk could be the latest tension between the North and the South of Korea. In the latest standoff, Kim Jong-un led government announced to cut all communication ties with South Korea, while also threatening further moves, after the later was found sending leaflets and other materials into the North, as per Reuters.
Elsewhere, China’s Ministry of Culture and Tourism issued an alert warning against travel to Australia citing an increase in racist attacks. Further, the India-China tussle is also growing momentum after Beijing recently put the Rising Star in command of forces in border face-off against India.
Amid all these plays, S&P 500 Futures drop over 0.10% to 3,223 by the press time. It’s worth mentioning that Wall Street marked a stellar performance with Nasdaq’s run to record high on Monday.
Considering the lack of major data/events, trades will keep eyes on the qualitative catalysts for fresh impulse.
Technical analysis
50d-ay SMA level around $1,700 acts as an immediate upside barrier for the bullion, a break of which could challenge the monthly top near $1,745. Alternatively, $1,670 and 100-day SMA near $1,645 could lure the bears during further weakness.
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.
