Despite the ongoing US-China trade tensions, gold failed to capitalize on its safe-haven status and challenge a strong technical resistance at $1,290 and slipped to $1,276 yesterday. On Wednesday, the bullion has recouped nearly all previous losses but the rebound looks unsustainable as the greenback continues to rise from multi-week lows.
The recent dynamics in the precious metal shows it looks attractive for buying on the dips. The prices have formed at least a temporary bottom marginally below the $1,270 mark and may stay afloat as the bullion may yet attract buyers amid further escalation of the US-China trade tensions. China has hinted that it could limit exports of rare earth metals to counter US pressure, which could trigger an agressive reaction fromTrump.
Technically, gold needs to overcome the $1,287 intermediate resistance so that to challenge the $1,290 level and to target the psychological $1,300 mark. Once above, the technical outlook for the metal will improve. As long as prices remain below this level, downside risks persist but they are looking limited at the same time.