Gold pulls back from 2-week high as US-China headlines improve risk-sentiment
- Trade optimism favors decline in safe-haves, including Gold.
- Geopolitical uncertainty emanating from the Middle East and the UK limit the Bullion’s downside.
Gold buyers fail to cross September 06 high as recently positive trade headlines from the US dragged the yellow metal to $1,521 during the initial Asian session on Tuesday.
The US Treasury Secretary Steve Mnuchin and the President Donald Trump both crossed wires with trade-positive comments off-late. While President Trump conveyed the Chinese commitment to buy more of the US farm products, Treasury Secretary Mnuchin said that Chinese Vice Premier will visit the US next week and the trade talks will resume in two weeks. Mr. Mnuchin also reasoned the Chinese delegation’s non-visit to the US farms by saying that it was “on the US request.”
Further, the UK PM Boris Johnson showed optimism to welcome the US and Canadian businesses post-Brexit at the United Nation’s (UN) general assembly whereas news of a trade meeting between the Japanese Finance Minister Taro Aso and the US Vice President Mike Pence also brightens the risk-tone.
On the contrary, Iran refrains from respecting the global push to return to the Nuclear 2015 deal by blaming the European partners’ non-obligation. Elsewhere, no breakthrough was spotted from the meeting between the UK PM Johnson and the EU President Jean-Claude Juncker.
Following the news, equities regain buyers’ attention while the US 10-year Treasury yields also recovered to 1.715% by the time of writing.
Moving on, trade/political headlines from the UN will be the key to watch wherein the Middle East and the US-China stories could gain major eye-share.
Technical Analysis
FXS Analyst Matias Salord holds on to the positive outlook unless prices decisively break below $1,520:
"The short-term outlook points to further gains as long as price holds on top of $1,520. Last week, again, XAU/USD found support around the $1,1480/85 zone and bounced to the upside. Today is breaking above last week highs, signaling further gains ahead. To the upside, the next resistance levels might be seen at $1,530 followed by $1,535 and $1,545. On the flip side, now $1,515 should be seen at the immediate support and then $1,506 that protects $1,490 and the critical support $1,480."