Gold: Fresh risk-off renews buying interest around $1,540
- Recently heavy risk-tone, amid trade/political headlines, pleases the Gold buyers.
- Uncertainty surrounding September month US-China trade talks joins, mixed Fed speak and Hong Kong geopolitical tension.
With the latest trade/political headlines renewing risk-off, Gold takes the bids near $1,540 by the press time of early Thursday.
The safe-haven witnessed a pullback on Wednesday as the US Dollar (USD), which generally has an inverse relationship with Gold, grew on the back of no major negatives, be it for trade or from economic calendar. With this, Wall Street recovered its previous losses and the US 10-year treasury yield also stood unchanged by the day-end to 1.468%.
However, the risk-on couldn’t last long as the latest Fed speak favors the US Federal Reserve’s monetary policy decision while the White House Adviser Peter Navarro keep exerting pressure for further rate-cuts. Elsewhere, Reuters ran a story expecting rate cuts from the People’s Bank of China (PBOC).
In a case of the trade deal with China, the US Treasury Secretary Steve Mnuchin seems uncertain about September meeting despite remaining mostly positive of the talks. Though, Agence France-Presse (AFP) released the latest updates from the group of top-tier business houses from the US that are complaining about the Trump administration’s tariff war with China.
On a geopolitical note, Xinhua terms China’s deployment of troops in Hong Kong as a routine annual rotation.
While a lack of clarity on market direction has been pushing Gold upward, an active economic calendar and trade/political news will play their role during the rest of the day.
Technical Analysis
Investors wait for a sustained break of recent high surrounding $1,555 in order to aim for $1,600 round-figure while a four-week-old rising trend-line at $1,518 offers near-term strong support.