Gold prices refreshed multi-year highs earlier this week but trimmed gains decently after yesterday’s plunge. The safe-haven demand has abated amid some signs of easing US-China trade tensions as the two countries agreed to resume talks in early October.
Besides, dollar demand reemerged after ISM Non-Manufacturing PMI and ADP employment data exceeded expectations and cooled Federal reserve rate cut bets. As a result, USD managed to trim losses against major counterparts, which in turn made the bullion turn defensive. By the way, the precious metal could face further downside pressure in the short term should the key NFP employment data come on the bullish side along with statements from the Fed’s Governor Jerome Powell.
In the longer term, however, gold remains within a robust upside trend as investors don’t expect any resolution to the US-China trade spat any time soon, while other negative political and economic developments globally will also continue to support safe-haven demand.
Technically, the bullion needs to hold above the $1,500 in the near term in order to avoid a more aggressive bearish correction. On the upside, the immediate resistance comes around $1,530.