The dollar was hit dramatically overnight, after comments from NY Federal Reserve President John Williams who hinted that lower rates and more aggressive cuts could come soon. Despite the later NY Fed attempts to temper the remarks, the greenback remained under pressure and trimmed loses only partially.
Against this backdrop, gold prices jumped to six-year highs marginally below $1,453 during the early session on Friday. Since then, the bullion retreated and turned negative on the day, trying to hold above $1,435. Despite the overbought conditions, the precious metal still has upside potential as major central banks are signaling a shift to a softer monetary policy.
Besides, market participants continue to express concerns over further escalation in the US-China trade war despite the recent reports that the two countries have resumed the negotiations. In these circumstances, the yellow metal will likely stay elevated in the meantime, with the $1,450 level is in market focus now. A decisive break above this threshold will pave the way to fresh long-term highs.