Gold regains poise and tests $1,560/oz
- The precious metal recovers ground lost in earlier sessions.
- The weaker greenback collaborates with the upside.
- Uncertainty on the US-China trade front bolsters the demand for gold.
The ounce troy of the precious metal is regaining the smile on Wednesday and is now advancing beyond the $1,550 level, or 2-day highs.
Gold focused on trade, risk
After two consecutive daily pullbacks, the yellow metal is showing signs of recovery amidst the renewed offered bias surrounding the buck and increasing inflows into the safe haven assets. In this regard, yields of the US 10-year note are navigating weekly lows in the sub-1.80% area after climbing as high as the 1.86% zone earlier this week.
The demand for the metal is on the rise on Wednesday as market participants continue to anticipate further effervescence in the Middle East, with the US, Iran and Russia taking centre stage, as well as upcoming tough negotiations in light of the US-China ‘Phase 2’ deal.
On the latter, it is worth mentioning that US Treasury Secretary S.Mnuchin said on Tuesday that tariffs will not be removed until a ‘Phase 2’ deal is in place, most likely after the US elections in November.
Gold key levels
As of writing Gold is gaining 0.39% at $1,552.43 and a breakout of $1,574.21 (38.2% Fibo of the December-January rally) would expose $1,587.93 (high Jan.6) and then $1,611.34 (2020 high Jan.8). On the downside, the next support emerges at $1,536.11 (low Jan.14) seconded by $1,514.10 (61.8% Fibo of the December-January rally) and finally $1,497.02 (100-day SMA).