Gold prices continue to decline on Tuesday and registered two-week lows around $1,535. The precious metal has trimmed intraday losses since then but remains under the selling pressure as market sentiment improves ahead of the ceremony of a phase one deal signing due tomorrow. But as this event has been priced in already, the downside risks for the safe-haven gold are limited at this stage.
In the near term, the bullion will follow dollar dynamics in the context of the upcoming US economic data. In particular, the consumer price index due later today will be important, as signs of a still subdued inflation will confirm that the Federal Reserve won’t shift to hiking rates in the foreseeable future, which is a dollar-negative scenario.
From the technical point of view, the yellow metal needs to hold above the $1,530 area in order to regain the lost ground with the initial target of $1,560. In a wider picture, the gold market remains bullish as long as the prices remain above the 100-DMA which comes just below the $1,500 handle. In the longer run, the precious metal could derive support from the potential geopolitical tensions as well as concerns over the economy if the upcoming data disappoint.