Spot gold was up 0.3% at $1,508.54 per ounce, as of 0547 GMT. In the previous session, prices fell 1.8%, their biggest one-day percentage decline since Sept. 5.
U.S. gold futures were up 0.2% at $1,515.70 per ounce.
· Gold has pulled back, given that there is some ambiguity as to how considerable the potential for impeachment is for the U.S. president and also his comments on trade with China has calmed market sentiments, said IG Markets analyst Kyle Rodda.
Gold has since bounced off from uncomfortable levels and is stuck in a range trading, Rodda added.
· The dollar index posted its sharpest daily gain in three months overnight and held steady in Asian trade, while stocks rose as investors welcomed U.S. President Donald Trump’s hints of progress toward a trade deal with China.
Trump said a deal to end a nearly 15-month trade war with China “could happen sooner” than people think, which could ease the pall of gloom over the global economic outlook.
· Political worries also eased as investors largely shrugged off the Democrats’ decision to begin an impeachment inquiry into Trump. That came even as a summary of a telephone call showed the U.S. president asked Ukraine’s president to investigate a political rival.
“Gold’s price from a fundamental perspective is still supported,” Rodda said, citing “there is still evidence that global economy is slowing down and policymakers will potentially partake in new quantitative easing programmes that is going to drive rates and yields down.”
Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.
· Indicative of investor sentiment, holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 1.81% to 924.94 tonnes on Wednesday.
· Spot gold is likely to fall to $1,488 per ounce, as it has broken a support at $1,514, according to Reuters technical analyst Wang Tao.
· Gold technical analysis: Bulls leaning on 1500 psychological support
We have been seeing failures at critical upside levels but the 1500 psychological support is so far holding up. Should this give out, then bears will target a 50% mean reversion of the early July swing lows to recent highs around 1470.
Should bears take full control, the next significant target will be down at the 19th July swing highs down at 1,452.93. On the upside, however, and should frisk-off fundamentals play havoc on markets again, bulls can look back to the 1535 resistance with the 1,550 level insight, which guards territories towards 1,590 as the 127.2% Fibo target.
· Among other precious metals, spot silver rose 0.4% to $17.97 per ounce.
Palladium was up 0.4% at $1,649.41 per ounce, while platinum gained 0.7% to $931.94 per ounce.
Reference: Reuters, FX Street
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