The prices extended gains to one-month highs above $1,300 but failed to confirm a bullish breakthrough and started to retreat.
The bullion is closely following investor sentiment in the context of the ongoing US-China trade war. Investors were spooked by retaliation from China yesterday despite the move was expected after Trump imposed additional tariffs for Chinese exports. On Tuesday, however, the risk sentiment has improved marginally after the US President said he expects that further trade negotiations to be successful.
Despite some relief, investors will remain cautious in the coming weeks as chances for striking a trade deal have declined after the latest escalation in tensions between the world’s two largest economies. As such, the precious metal will likely stay afloat at this stage as the trade war could get worse before it gets better. In the short term, the bullion needs to hold above the $1,290 area in order to make another bullish attempt at $1,300.