Gold stays below 50-DMA despite recent challenges to risk tone
- Gold pauses two-day-old recovery, repeats fashion of pulling back from 50-DMA.
- Doubts over US-China trade relations, hard Brexit concerns question the market’s previous risk-on.
- US data, Fedspeak and trade/political headlines to offer fresh impulse.
Gold remains under pressure while trading around $1,475 during Tuesday’s Asian session. The Bullion earlier benefited from the US Dollar (USD) weakness but fails to respond to the latest risk-off moves.
Chinese media is once again playing its role of doubting any strong trade relations between the US and China whereas news from UK politics raises fears of hard Brexit. Elsewhere, Moody’s negative outlook for 2020 global manufacturing precedes the latest doubts over China’s steel production as conveyed by the Fitch.
That said, news of the phase-one between the United States (US) and China, coupled with general election results from the United Kingdom (UK), triggered the recent risk-on. Further, the safe-haven also benefited from the greenback’s decline in recent days.
The USD dropped on Monday as downbeat figures of the NY Empire State Manufacturing Index raised concerns of the US economic strength. Also, the St. Louis Federal Reserve Bank President James Bullard recently said to MNI news that he will wait for the economic reaction of the latest policy decisions prior to taking sides on future actions by the US Federal Reserve (Fed).
The market’s risk sentiment seems to be on the back foot as the US 10-year treasury yields drop to 1.87% while S&P 500 Futures also weaken to 3,195 by the press time.
Traders will now look forward to the US economic calendar whereas keeping eyes on trade/political headlines.
Technical Analysis
50-Day Simple Moving Average (DMA), around $1,478.50, limits the immediate upside of the yellow metal while a three-week-old ascending trend line near $1,464 can act as nearby support.
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.
