Gold prices failed to hold above the $1490 level and turned lower for the second consecutive session, dropping to over one-week low. Against the backdrop of growing optimism over a partial US-China trade deal, a modest US Dollar uptick turned out to be one of the key factors that exerted some fresh downward pressure on the dollar-denominated commodity. A slightly softer tilt in the risk mood around equity markets underpinned the precious metal's perceived safe-haven demand. This coupled with Fed rate cut expectations and a sharp intraday slide in the US Treasury bond yields further extended some support to the non-yielding yellow metal. Hence, it will be prudent to wait for some strong follow-through selling before confirming any further downside as investors start repositioning for the upcoming key event risk, which is the highly anticipated FOMC monetary policy decision later today.
Gold prices failed to regain some traction during yesterday’s session and instead printed new weekly lows of $1483.52 per ounce. The price is currently consolidating just below the $1490 level while retesting the upper band presented on the chart. If the price succeeds to hold firm above it, we will be focusing on the upside again, especially the $1500.77 resistance level.
Support: 1486.98/ 1474.99
Resistance: 1494.87/ 1500.77