The two world’s largest economies started a new round of talks yesterday in another attempt to end the nearly year-long trade war. U.S. Treasury Secretary Steven Mnuchin said today he had a productive working dinner in Beijing. Meanwhile, White House economic adviser Larry Kudlow said the United States may drop some tariffs if a trade deal is reached while other restrictions will stay in place to ensure Beijing's compliance.
In general, the latest comments and headlines suggest that the two countries may announce further progress in their relations and new steps towards a deal. In this scenario, gold prices could come under additional selling pressure as risk sentiment will improve further.
The short-term technical outlook has deteriorated after a break below the $1300 support area. The next target for the bears lies at $1285. Once below this level, the $1280 figure will come into play.