Gold fails to hold above $1200, remains sideways

• Gold weakened during the US session and seems vulnerable ahead of the Asian session.
• The ounce peaked at $1,203 but failed to hold above $1,200.

Gold peaked at the beginning of the US session at $1,203.30/oz but then turned to the downside and near the end of the day was looking weak, trading at $1,197, slightly above daily lows. The move lower took place amid higher US yields and a rally in USD/JPY. The 10-year yield reached at 3.04%, the highest level since May while the greenback rose sharply against the yen but remained limited versus other currencies.

The yellow metal did not benefit on Tuesday from trade tensions between the US and China with the new tariffs announced from both countries. Also, the rally in US stocks did not offer support to gold. The Dow Jones was up 0.85%, at the highest since January, headed toward a record close.

XAU/USD Technical outlook

According to Valeria Bednarik, Chief Analyst at FXStreet, the daily chart is offering now a neutral-to-bearish stance, as spot gold keeps hovering around a directionless 20 SMA but well below bearish larger ones, while technical indicators also lack clear directional strength, right below their midlines.

In the shorter term, she notes that in the 4 hours chart, the technical outlook is quite similar, “as the price seems unable to leave the area around a congestion of moving averages, while technical indicators gain downward traction below their midlines.”