Gold prices look for clear direction around $1,463, trade pessimism prevails

Following a downbeat start to December, Gold prices await further clues near $1,463 amid Tuesday’s Asian session.  |  03/12/2019 00:07
  • Gold seesaws around $1,463 after a negative start to the month.
  • Fresh trade protectionist actions/measures from the US, challenges to the Fed exert pressure on the market’s risk tone.
  • The US dollar bears seem to catch a breath after the worst daily losses since early September.

Following a downbeat start to December, Gold prices await further clues near $1,463 amid Tuesday’s Asian session. That said, the mixed plays of trade war risk, doubts over the Fed’s action and a pullback in the US Dollar Index (DXY) seem to trouble the market watchers by the press time.

The United States (US) announced multiple trade-restrictive policies/statements that not only unearthed the fears of US-China trade war but also ignited concerns surrounding the US trade relations with the European Union (EU) and South America. Further, China’s sanctions against the US non-government organizations, for their role in Hong Kong protests, add to the investors’ worries.

Also contributing to the market jitters were the recent statements from the US President Donald Trump who pushed for further rate cuts and a weaker greenback considering the latest soft manufacturing numbers.

With this, Wall Street registered heavy losses while the S&P 500 Futures is in the negative territory by the time of writing. Further, the US 10-year treasury yields also trim the previous gains to 1.822%.

While the USD weakness and a risk aversion should have helped the precious metal, doubts over the health of one of the largest gold consumer China, as recently signaled by Moody’s, keep the prices in check.

Investors will now look for further clarity over the USD moves and the trade/political headlines for fresh clues. However, recovery to the last month’s losses can be expected if the risk sentiment keeps struggling.

Technical Analysis

A monthly downward sloping trend line and 21-day Simple Moving Average (SMA) around $1,466 act as immediate resistance holding the gate for the bullion’s rise to November 20 high of $1,479. Meanwhile, $1,450 and the previous month low near $1,445 can entertain sellers during the declines.

 

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