Spot Gold edged lower through the early European session on Monday and is currently placed at the lower end of its daily trading range, around the $1490 region.
The precious metal failed to capitalize on its early uptick to the key $1500 psychological mark and drifted back into the negative for the second consecutive session on Monday – also marking its third day of a downfall in the previous four on reports that Saudi Arabia would agree to a ceasefire in Yemen.
Fading safe-haven demand adds to the recent selling bias
This coupled with the growing optimism over a possible resolution of the prolonged US-China trade disputed, despite mixed trade-related headlines, largely negated the prevalent cautious mood around equity markets and did little to lend any support to the commodity’s perceived safe-haven status.
It is worth mentioning that reports on Friday suggested that the US Administration is looking to restrict capital flows into China and to limit Chinese companies from trading on the US exchanges. Meanwhile, the US Treasury officials on Saturday denied any plans to do so at this time but also did not rule them out.
The non-yielding yellow metal was further pressurized by a modest pickup in the US Treasury bond yields. However, a subdued US Dollar demand might turn out to be the only factor extending some support to the dollar-denominated commodity – Gold amid relatively thin US economic docket.
Hence, it will be prudent to wait for a strong follow-through selling before traders start positioning for an extension of the recent pullback from multi-year tops and a possible move below monthly swing lows support near the $1483 region, towards testing the next major support near the $1450-45 region.
