Gold trades with modest losses, below $1475 level

Gold edged lower through the early European session on Thursday and eroded a part of the previous session's post-FOMC positive move to weekly tops.

The Federal Reserve on Wednesday, as was widely expected, left its benchmark interest rate unchanged and indicated that rates would remain on hold. The US central bank also signalled that rates would remain on hold through 2020, which eventually turned out to be one of the key factors that provided a goodish lift to the non-yielding yellow metal.

Meanwhile, the Fed's accommodative stance provided a modest lift to the global risk sentiment. The same was evident from a positive mood around equity markets and dented the precious metal's safe-haven status. The commodity, for now, seems to have snapped three days of winning streak, albeit a combination of factors might help limit deeper losses.

The downside remains cushioned amid persistent trade uncertainty ahead of the December 15 deadline for new US tariffs on around $156 billion worth of Chinese goods. Adding to this, a subdued US dollar demand, weighed by dovish sounding Fed statement, might further lend some support to the dollar-denominated commodity.

Hence, it will be prudent to wait for some strong follow-through selling before confirming that this week's positive move might have already run out of the steam and positioning for any meaningful slide. Moving ahead, the release of the US Producer Price Index (PPI) will now be looked upon for some short-term trading impetus.

Technical levels to watch