Gold: Sellers maintain the hold around $1310 as greenback dominates risk-off

Gold trades near $1310 during early Asian sessions on Thursday. The yellow metal failed to take advantage of the market’s risk-off run as the USD strength disappointed bullion buyers. Global economic slowdown fears continue to hurt trade sentiment whereas political uncertainty adds strength into the safe-haven demand.

Dovish comments from the influential personalities, be it the European central bank (ECB) President Mario Draghi or the US President Donald Trump’s pick for Fed Governor Stephen Moore, dragged global investors back to risk safety on Wednesday. Increasing uncertainty over Brexit could also be considered as an additional support to the safe-havens.

The US 10-year treasury yields dropped to 15-months low and Wall Street also took the red as market players rushed to safe-havens.

As a result, the JPY and the USD were in demand wherein the US Dollar (USD) gained additional support from the Bank of Japan’s (BOJ) higher support to the doves. With the US Dollar in demand, the Gold couldn’t enjoy the flight to safety and ended up declining to the lowest levels in a week on Wednesday. 

Final reading of the US fourth quarter (Q4) gross domestic product (GDP) will bear immediate market focus while political drama surrounding Brexit could keep playing background music. The annualized GDP for Q4 2018 is likely to soften to 2.4% from 2.6%.

Technical Analysis

While 50-day simple moving average (SMA) and support-line of a short-term ascending trend-channel could offer immediate rests to the yellow metal around $1308 and $1306, the 100-day SMA level of $1302 will be crucial to watch as a break of which can recall $1288 and $1279 on the chart.

Meanwhile, $1312, $1323 and channel-resistance near $1326 may limit nearby increase of the bullion, a break of which could push buyers towards $1333 and $1346.