After a rally on Friday, gold prices are back under the selling pressure as risk sentiment has improved at the start of the trading week. Positive data out of China eased investor concerns over the state of the world’s second largest economy and fueled risk appetite across the board. China official manufacturing PMI came in at 50.2 in November up from 49.3 in October, to hit the highest level since March.
However, this optimism could wane quickly if there is no progress on the US-China trade front. So, the downside risks for the previous metal still look limited at this stage as risk aversion could reemerge at any moment, especially amid the speculations that the two countries may postpone the phase one deal into 2020 due to a number of issues that have yet to be resolved.
As such, gold could regain the $1,465 figure should investor sentiment deteriorate again, with the $1,450 area will continue to serve as a meaningful support for the market. In the short-term charts, the technical picture looks bearish, with prices need to get back above the 100-SMA just below $1,463 in the 4-hour timeframes to shrug off the selling pressure. Otherwise, the metal may challenge last week’s lows below $1,450, where some bids could limit the downside impetus. As there is high uncertainty on the trade front as well as ahead of the crucial OPEC+ meeting, gold will likely remain directionless in the days to come and the intraday volatility nay stay elevated.