After a dramatic plunge on Friday amid a broad-based dollar rally on upbeat US jobs data, gold prices have been making recovery attempts since the start of the week. The $1,480 area continues to serve as the key resistance area, standing on the way to the $1,500 figure.
Safe-haven demand seems to be reemerging on Tuesday as investors still don’t see any concrete progress towards at least a partial trade deal between the United States and China. Moreover, the December 15 tariffs deadline looms and this makes investors nervous. Therefore, should investor sentiment deteriorate further in the short term, the yellow metal may receive a boost and recoup at least a part of the recent losses.
On the other hand, there is a major risk event for gold this week. On Wednesday, the two-day Federal Reserve policy meeting concludes, with the outcome of the event will set the tone for the greenback and in turn for the precious metal. The selling pressure on gold could come from a possible pock up in USD demand should the US central bank express a less dovish tone on the outlook for the country’s economy and its monetary policy.
Technically, gold prices need to hold above the $1,454 figure in order to avoid deeper losses in the short term. In a positive scenario, the bullion may regain the $1,466 area and retarget the above mentioned resistance around $1,480.