· Gold prices slipped on Tuesday as moves by some countries to relax coronavirus-led restrictions overshadowed concerns of souring U.S.-China relations and dampened the metal's safe-haven appeal.
Spot gold eased 0.1% to $1,700.14 per ounce at 0524 GMT. U.S. gold futures fell 0.4% to $1,706.10.
· "We are holding quite steady around the $1,700 level. On one side, you've got easing in lockdowns and that is probably improving investor sentiment and a move away from safe havens towards risk assets," said ING analyst Warren Patterson.
"On the other side, tensions between China and the U.S. in relation to COVID-19 are reigniting once again. These two opposing forces are keeping the market on hold at the moment."
Italy and the United States were among a slew of countries that tentatively eased lockdowns on Monday to revive their economies.
· Investors, however, remained worried about brewing Sino-U.S. tensions after President Donald Trump threatened new tariffs on China for its handling of the outbreak, with his administration "turbocharging" an initiative to remove global industrial supply chains from Beijing.
Gold, which is considered an alternative asset during times of economic and political turmoil, rose 18% last year due to the tariff war and interest rate cuts by the U.S. Federal Reserve.
It has gained 12% so far this year as the Fed kept its benchmark rate at near zero and pumped trillions in emergency funding into U.S. financial markets. Other central banks and countries have also taken similar measures to prop up their virus-hit economies.
The widespread stimulus measures will be gold's longer-term tailwind, analysts said, as the metal is considered as a hedge against inflation and currency debasement.
· Meanwhile, investors awaited U.S. ISM non-manufacturing PMI data, due later in the day, and weekly jobless claims and April non-farm payrolls numbers scheduled for later this week.
"The consensus is for very bad numbers ... the main catalyst for gold here is the extent to which they can surprise lower or higher. The data should really deviate from expectations to really animate gold one way or the other," DailyFx currency strategist Ilya Spivak said.
· Reflecting the appetite for bullion, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.4% to 1,071.71 tonnes on Monday.
· Gold Price Analysis: Rejected above $1,710
Gold is threatening to drop below $1,700 at press time, having faced rejection above the 200-hour average at $1,710 on Monday.
Notably,Monday's Doji-shaped candle suggests the bounce from Friday's low of $1,670 has ended. A similar sentiment is being echoed by the contracting triangle breakdown seen on the hourly chart relative strength index.
The metal risks falling to the lower end of the daily chart pennant at $1,673. A close below that would confirm a bearish reversal pattern on the daily chart. On the higher side, acceptance above Monday's high of $1,714 would expose the pennant resistance of $1,730. A close above that level would imply a continuation of the rally from the April low of $1,568.
· Gold: On track to breach $1900 mark – Bloomberg Intelligence
In an interview with Kitco News, Bloomberg Intelligence Senior Commodity Strategist, Mike McGlone, said the path of least resistance appears to the upside in gold, as the bulls look to breach the $1900 mark.
“Gold is looking at a similar launchpad as in 2008 when prices breached $1,000 and began the rally which led to an all-time high level of just above $1,900.
It was the cut to zero interest rates by the Federal Reserve in December 2008 that accelerated the gold bull market to the 2011 peak. Covid-19 is a worthy catalyst to buoy gold toward its highs. That fact that the metal has reached records in most currencies leads us to expect that a similar result for dollar-denominated gold is only a matter of time.
· Gold Price Forecast – Gold Markets Gap to Kickoff Week
Gold markets gapped to the upside to kick off the week, breaking above the $1700 level before pulling back to that level to find support again. Ultimately, the market is a very neutral candlestick, and that of course is a good sign that it is trying to build up the momentum to go to the upside. The 50 day EMA sits underneath and a hammer from the Friday session that shows signs of support in and of itself. Ultimately, this is a market that has plenty of support underneath, so therefore I think it is only a matter of time before we rally from here.
Ultimately, if the market breaks down below the 50 day EMA, then it could go looking towards the $1650 level. If we break down below there, the market probably goes down to the $1600 level as well. All things being equal, I do think that gold rallies due to the significant amount of negative headlines out there that could come into play, so therefore you should pay attention to the risk appetite in general. As risk appetite wanes, we will see gold markets pick up a bit of momentum. To the upside I believe that the $1800 level will be the target longer-term, but obviously we have a lot of work to do to determine whether or not we can continue to go higher. Looking at this chart, it is simply a matter of finding value.
· Among other metals, palladium rose 0.6% to $1,858.91 per ounce, while platinum eased 0.3% to $763.56 and silver slipped 0.4% to $14.77.
Reference: Reuters, FX Street, Daily FX
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