FxWirePro: Gold trades well below $1500 on trade optimism, any break below $1480 confirms further weakness

Major support- $1458

Gold is trading in a narrow range between $1458 and $1555 for the past two months. The major factors affecting prices of gold are the Fed dot plot, the US-China deal, and Brexit. US economic data released in the previous month was slightly weaker than expected especially the ISM manufacturing index, retail sales. But NFP came at 1280000 vs forecast of 89000 and average wage inflation came unchanged at 3%.

Markets eye US-Sino trade talks progress for further direction. As part of an initial deal, both countries are planning to roll back tariffs. China wants the US to scrap 15% tariffs on $125 billion worth of Chinese goods which is an effect from Sep 1st.

US 10-year yield is showing a good recovery of more than 12%, after forming a minor bottom around 1.67%. Any further jump can be seen only above 1.907% and is currently trading at 1.85%.

On the flip side, near term support is around $1480, any violation below will drag the yellow metal down till $1473/$1458. Major bearishness only below $1458.

The major resistance is around $1518-20, the indicative break above will take the gold to the next level till $1535/$1555.

It is good to sell on rallies around $1489-90 with SL $1500 for the TP of $1458.