Gold struggles around 50-day EMA amid US-China trade jitters, USD strength

  • Gold consolidates recent gains amid recent recheck of risk sentiment.
  • US-China likely to sign “Phase One” in December, the US seems to accept Chinese demands.
  • US dollar strength keeps prices under check, Fedspeak has been mixed.

While broad strength of the US dollar (USD) exerts downside pressure on gold prices, uncertainty surrounding the US-China trade relations keeps the decline limited. As a result, the safe-haven seesaws near $1,490 amid initial Thursday morning in Asia.

Ever since the United States (US), monthly employment data flashed better than forecast readings of Friday, the USD bulls seem to have anticipated a stop to the Federal Reserve’s (Fed) further rate cuts. As a result, the greenback registers upbeat despite mixed macros and Fedspeak.

It’s worth mentioning that demand from India, among the world’s top bullion consumers, declines 32% in the third quarter (Q3) of 2019 as per the World Gold Council’s (WGC) recent trend report. The WGC also downgraded its Indian gold demand prediction for the whole 2019 year to around 700 tons, compared with 760 tons the previous year.

Over the US-China trade counter, the “Phase One” deal is likely delayed to December, as said by Reuters, but the story from Fox Business continues spreading optimism amid calls of the US likely to delaying December 15 tariff hike on China’s goods.

Comments from the Fed policymakers (Fedspeak) signal challenges to the economy but holds broad optimism surrounding the present monetary policy and expectations of future recovery.

While a lack of economic data prevails during the day, news concerning the initial trade agreement between the US and China could keep traders entertained.

Technical Analysis

While 50-day Exponential Moving Average (EMA) around $1,492 acts as immediate upside barrier, $1,500 and last week’s high near $1,515 could keep buyers capped then after. On the downside, $1,475 and $1,455 could keep the bullion’s short-term downside capped.

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