Gold flirts with session lows, around $1805 level
- Gold witnessed a modest pullback on Thursday and snapped three days of winning streak.
- Bulls seemed rather unimpressed by the prevalent risk-off mood, sliding US bond yields.
- A modest USD uptick was seen denting demand for the dollar-denominated commodity.
Gold edged lower through the early European session and refreshed daily lows, around the $1805-04 region in the last hour.
The precious metal failed to capitalize on this week's goodish bounce from the $1790 support area, rather met with some fresh supply on Thursday and snapped three consecutive days of winning streak. The latest optimism over a COVID-19 vaccine was seen as one of the key factors undermining demand for the safe-haven commodity.
Gold was further pressured by reports that the US President Donald Trump would not impose further sanctions on Chinese officials responsible for enacting Hong Kong's national security laws. However, a White House National Security Council spokesman said that on Wednesday Trump has not ruled out further sanctions.
Nevertheless, concerns about escalating tensions took its toll on the global risk sentiment. The risk-off mood was reinforced by sliding US bond yields, albeit did little to lend any support the non-yielding yellow metal. Traders took cues from a mildly positive tone surrounding the US dollar, which tends to weigh on the dollar-denominated commodity.
It will now be interesting to see if the lack of any strong follow-through buying points to possible bullish exhaustion or the pullback is still seen as an opportunity to initiate fresh bullish positions.
Market participants now look forward to the US economic docket, highlighting the release of monthly Retail Sales, Philly Fed Manufacturing Index and Initial Weekly Unemployment Claims. The data, along with the broader market risk sentiment might influence the USD price dynamics and produce some short-term trading opportunities.
Technical levels to watch