Gold: Bulls pay a little heed to trade/political headlines while nearing multi-week top
- Gold prices extend the late Friday's pullback from the nine-week top.
- Mixed news concerning the US-China trade deal, the Middle East tension fail to provide any clear direction to the bullion prices.
- Year-end sparse trading will keep prices little changed, Tuesday’s Chinese PMIs will be the key to watch.
Gold prices remain under pressure around $1,510.85 amid the early Asian trading on Monday. In doing so, the yellow metal ignores the weekend news that should have been provided additional fuel to the safe-havens run-up beyond the nine-week high.
Cautious optimism surrounding the phase-one deal got another puzzle to solve during the weekend, which came from the South China Morning Post (SCMP). The Chinese media conveyed Beijing’s readiness to follow the promises on the condition that the US behaves seriously. The tone of the article, as usual, sounds like the warning to Washington despite the US President Donald Trump’s cheering up for the nearness to the signing.
On the other hand, the yellow metal should have benefited from Bloomberg’s communication of the US “counter strikes” targeting Iraqi and Syrian spots two-days after its civilian contractor’s killing by the rocket attack on an Iraqi military base.
Read: What you need to know before markets open: AUD technically precarious, fundamentals are balanced
The lack of reaction could be traced to the news that China is streamlining the loan rate. This could have a positive impact on the world’s second-largest economy while considering a short-term increase in the loans due to a lesser Loan Prime Rate (LPR) than the previous reference rate.
Even so, markets are still brushing their eyes amid the year-end holiday mood. Tokyo open can offer intermediate move but the lack of major events/data could hinder the momentum ahead of Tuesday’s Chinese official Purchasing Managers’ Index (PMI) data due to 01:00 GMT.
Technical Analysis
Prices are struggling to clear $1,518/20 area comprising highs marked since October, which in turn can trigger a fresh pullback towards the early-month levels near $1,418. However, Wednesday’s low of $1,495 and $1,500 can keep sellers away for the time being.