Gold trades with modest gains around $1490 level, lacks follow-through


  • North-Korean headlines prompt some safe-haven buying on Wednesday.
  • The upside seemed limited, rather capped amid US-China trade optimism.

Gold traded with a positive bias through the early European session on Wednesday and recovered a part of the previous session's slide to over four-week lows.
 
Continuous improvement in the global risk sentiment - supported by growing optimism over the resumption of the US-China trade talks - has been acting as a key factor behind the precious metal's recent corrective slide from multi-year tops.

Geopolitical news provided immediate respite

However, the latest news report that North Korea test-fired a super-large multiple rocket launcher on September 10 extended some support to Gold's perceived safe-haven status and helped snap four consecutive days of losing streak on Wednesday.
 
The uptick, however, lacked any strong bullish conviction and remained capped below the key $1500 psychological mark amid a follow-through pickup in the US Treasury bond yields, which tends to drive flows away from the non-yielding yellow metal.
 
This coupled with the latest positive trade-related development, wherein China reportedly offered to buy more US agricultural products in exchange for a delay in tariffs, further collaborated towards keeping a lid on any meaningful recovery for the metal.
 
Moving ahead, Wednesday's US economic docket - highlighting the release of Producer Price Index (PPI) - will influence the US Dollar price dynamics and produce some short-term trading opportunities around the dollar-denominated commodity - Gold.
 
From a technical perspective, the commodity's inability to attract any meaningful buying interest now seems to suggest that the near-term bearish bias might still be far from being over and support prospects for a further depreciating move.
 
Hence, any subsequent recovery back towards the $1500 handle runs the risk of meeting with some fresh supply, rather seen as an opportunity to initiate some fresh bearish positions for an eventual breakthrough mid-August swing lows.

Technical levels to watch

XAU/USD

Overview
Today last price 1491.61
Today Daily Change 6.01
Today Daily Change % 0.40
Today daily open 1485.6
 
Trends
Daily SMA20 1519.06
Daily SMA50 1469.49
Daily SMA100 1394.5
Daily SMA200 1342.72
Levels
Previous Daily High 1500.85
Previous Daily Low 1484.9
Previous Weekly High 1557.03
Previous Weekly Low 1502.95
Previous Monthly High 1554.63
Previous Monthly Low 1400.9
Daily Fibonacci 38.2% 1490.99
Daily Fibonacci 61.8% 1494.76
Daily Pivot Point S1 1480.05
Daily Pivot Point S2 1474.5
Daily Pivot Point S3 1464.1
Daily Pivot Point R1 1496
Daily Pivot Point R2 1506.4
Daily Pivot Point R3 1511.95

 

 

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