On Thursday, gold prices gripped steadily ahead of Sino-U.S. trade negotiations. On the other hand, appeal for government bonds and Japanese yen and a key technical resistance restrained gains for the safe-haven metal.
Spot Gold was steady at $1,280.76 per ounce at GMT. And U.S. gold futures were also firm at $1,281.30.
Analyst at DailyFX, David Song said, “We are not in the flight to safety or panic mode despite the risk-averse market we are seeing right now and that’s why we are not seeing gold prices rally.”
After gold prices rose in its highest since April 15, the precious metal closed near session lows on Wednesday.
Song added in his statement, “There could be a deal between U.S. and China. We are watching $1,250-$1,260 levels with 200-day moving average a key for gold.” Aside from that, the small increase of Japanese yen is mainly due to the global markets’ risk-off sentiment.
The Japanese currency surged against the falling dollar. And stocks have withdrawn while government bonds heightened.
Washington is accusing Beijing of backtracking from obligations it made during trade negotiations. President Donald Trump made a threat to raise existing tariffs on Chinese goods on Friday. And also, Trump wants to charge new levies if there is no deal.
Because of risk-averse markets, white gold was able to give support. But prices have not managed to record a meaningful uptrend with $1,290 levels continue playing as a key technical barrier.
In the note of Singapore-based Phillip Futures, he said, “The precious metal has struggled to hold bullish gains as technical overview remains negative for the current term.”
Futures also added, “A continuation of the negative trend scenario during intraday trading session will see market forces test the key support of $1,274.”
As spot gold failed to smash a resistance at $1,291 per ounce, it may take place into $1,267 to $1,274 range.