Gold prices rally has stalled last week at fresh multi-year highs around $1,555 last week. Since then, the precious metal turned into a consolidation mode with a bearish bias and struggles to regain the upside impetus amid the overbought conditions and a generally stronger dollar.
The greenback demand rose across the board, in part due to some recovery in the US Treasury yields as well as amid an aggressive sell-off in the euro. The common currency is trading at fresh more than two-year lows and now threatens the 1.09 figure. At that, the latest escalation in the US-China trade war failed to give a lift to the bullion as investors were prepared for another portion of tariffs.
In the short-term, upbeat ISM manufacturing survey could hurt the yellow metal further amid a robust USD demand. However, the downside potential in the gold market is limited at this stage as global investors remain cautious amid developments in the US-China, the UK, Hong Kong and Argentina.
Technically, the bullion needs to hold above $1.492 in order not to lose the upside impetus in the longer term charts. As long as the prices show consolidation above $1,515, chances of resuming the ascent remain high.