Gold surrendered a major part of its early modest gains to the $1288 area and might now be headed towards the middle of its daily trading range after receiving support again from the $1280 level. After Wednesday's sharp intraday pull-back from three-week tops, the precious metal regained some positive traction on Thursday and was being supported by the global flight to safety amid the recent escalation of US-China trade tensions. However, the ongoing sharp decline in the US Treasury bond yields, with the yield on the benchmark 10-year government bond now down over 4bps, extended some support the non-yielding yellow metal and might help limit deeper losses but the main focus remains glued to two-day high-level US-China trade negotiations.
Gold prices edged higher again as expected to retest the trend line presented on the chart and printed a daily high of $1288.09 per ounce, but quickly erased again the gains in repeated scenario to find support at 1280 level. The price is currently trading just below the 1285.34 resistance level as the momentum is starting to build up. Our focus remains on the upside while still expecting to break above the trend line and settling above it.
Support: 1282.19/ 1280.11
Resistance: 1285.35/ 1288.35