Gold pulls back amid trade jitters, lack of fresh catalysts

  • Easy money concerns triggered risk-on sentiment, taking buyers off the yellow metal.
  • The US-China trade stalemate continues while the US refrained from blacklisting Iranian Foreign Minister.
  • US PPI and Fedspeak can offer fresh impulse amid political/trade headlines.

Gold refrains from carrying its previous weakness amid lack of fresh catalysts even as the US-China trade stalemate continues while taking the rounds to $1408.70 ahead of the European open on Friday.

Recently easy money signals from global central bank leaders pushed investors off to equities in search of higher returns, resulting in a negative daily closing of the bullion.

However, as per the ANZ report, central banks have been on the gold buying spree off-late. The same could have been a reason for the precious metals’ latest run-up.

While the US President Donald Trump accused China of not following G20 promises, the Chinese media criticized the US diplomats of being envious.

Elsewhere, Reuters report that the US refrained from blacklisting Iranian Foreign Minister eased some pressure off the US-Iran geopolitical tension.

Global barometer of risk sentiment, the US 10-year treasury yield rose to one month high on Thursday while holding the gains around 2.127% by the press time.

Moving on, the US Producer Price Index (PPI) and comments from the US Federal Reserve Bank of Chicago President Charles Evans will gain immediate market attention for fresh clues.

Technical Analysis

FXstreet Analyst Ross J.Burland spots bull’s lack of commitment, as portrayed by pin bars on the daily chart, to convey the yellow metal’s sideways momentum:

The precious metal's prices have consolidated in 1381 and 1439. There are a series of bearish pin bars on the daily charts, signifying resistance and lack of commitment from the buyers. The 20-day moving average supports but on a break lower, bears would target a 50% retracement of the April swing lows to late June swing highs around 1352. On the flipside, however, bulls broke the 1410 level and marked 1418 tops. Bulls can look ahead to the 1440 key resistance which makes way for a continuation to the May 2012 lows at 1527.

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