Gold sticks to modest gains, around $1425 region
- Persistent global trade worries continue to benefit the commodity’s safe-haven status.
- A fresh leg of a downfall in the US bond yields undermine USD and remained supportive.
- Traders now eye US ADP report and ISM non-manufacturing PMI for some impetus.
Gold surrendered a major part of its early gains back closer to multi-year tops, though has managed to hold its neck above session lows and is currently trading around the $1425 region.
The precious metal continued gaining positive traction for the second consecutive session and added to the previous session's strong gains. A combination of supporting factors lifted triggered a sharp up-move on Tuesday, lifting spot prices back above the key $1400 psychological mark.
As investors looked past the latest optimism over the US-China trade truce, persistent trade war fears continued weighing on investors' sentiment and provided an additional boost to the precious metal's relative safe-haven status during the Asian session on Wednesday.
The global risk sentiment took a knock after the US threatened to impose tariffs on $4 billion worth of European goods, which coupled with a fresh leg of a downfall in the US Treasury bond yields further collaborated towards driving flows towards the non-yielding yellow metal.
Despite the supporting factors, the positive momentum quickly ran out of the steam near the $1440 region. The intraday pullback lacked any obvious fundament catalyst and might now be seen as the first sign of a possible bullish exhaustion, paving the way for a near-term corrective slide.
Moving ahead, Wednesday's US economic docket - featuring the releases of ADP report on private-sector employment and ISM non-manufacturing PMI, might influence the US Dollar price dynamics and eventually provide some impetus to the dollar-denominated commodity.
Technical levels to watch