Gold prices have been trading with a bearish bias since September, with the bullion had to retreat from long-term highs just below $1,557, down to the current levels below the $1,500 handle which now stands as the immediate resistance. Once above, the yellow metal could try to regain a more robust momentum.
In the short term, gold may resume the upside move after yesterday’s rebound should risk sentiment in the global financial markets continue to deteriorate amid uncertainty over Britain’s exit from the European Union and over further progress in the US-China trade relations. Also, investors are nervous ahead of a much-anticipated EU leaders’ summit, which could bring more Brexit news. As the DUP party said it will not support the deal, market participants will likely be cautious ahead of a major event.
Technically, downside risks prevail as long as gold remains below the mentioned $1,500 handle, with the chance of a break above this hurdle remains high. On the downside, the yellow metal needs to hold above the $1,475 figure in order to avoid further losses down the road. Meanwhile, in the weekly charts, there is a scope for further decline, probably to $1,440, where long-term buyers could reemerge.