Gold prices are trying to resume the ascent after a drop on Wednesday. The yellow metal failed to stay above the $1,320 figure and slipped to two-week lows below $1,317, where buyers reemerged. Today, the bullion is making attempts to regain the $1,323 threshold amid souring risk sentiment.
Stocks are falling on Thursday amid the fading optimism over the US-China trade talks after comments by the US trade chief Lighthizer who sent a clear signal that any deal between the two economies should be all or nothing. His statement contrasts with Trump’s more optimistic remarks earlier this week when he raised hopes for striking a deal.
Poor Chinese data added to investor concern. The manufacturing activity contracted more quickly than in January due to the weeklong Lunar New Year holiday. The official manufacturing purchasing managers index dipped to 49.2 from 49.5 in the previous month. This is the lowest reading since February 2016.
As such, risk-off sentiment will likely prevail in the global financial markets in the short term, which should support the precious metal as a safe-haven asset.
Technically, the bullion needs to stay above the $1,320 level in order to resume the ascent afterwards. On the other hand, gold is trading at relatively high levels now and may need a stronger catalyst to attract demand.