Gold struggles to gain altitude despite renewed US-China political tensions
- Gold remains trapped in $1,470-$1,475 range despite fresh US-China political tensions.
- China reduced the one-year and five-year loan prime rate, as expected.
- China's rate cut has also failed to put a bid under Gold.
Gold, a classic safe-haven asset, is having a tough time posting gains despite the renewed political tensions between the US and China.
The yellow metal remains trapped in a narrow range of $1,470 to $1,475 for the eighth straight hour.
The US Senate, in a unanimous vote, passed legislation on Tuesday aimed at protecting human rights in Hong Kong. The “Hong Kong Human Rights and Democracy Act” will now go to the House of Representatives, which approved its own version of the measure in October.
China's Foreign Ministry was out on the wires a few minutes before press time, criticizing the US' move and threatening retaliation.
The futures on the S&P 500 are feeling the heat of the fresh political tensions. The index futures are currently down 0.24% on the day.
The AUD/JPY pair, a barometer of risk sentiment in Asia, has also dropped by almost 30 pips in the last sixth minutes. Gold, however, is struggling to find takers.
The yellow metal's inability to score gains looks more confounding if we take into account the decision by China to cut interest rates. The World's second-largest economy reduced the one-year loan prime rate to 4.15% from 4.20% and the five-year rate to 4.80%from 4.85%. Note that the rate cut was anticipated by most analysts.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
