Gold holds steady in a range, just below $1510 level
- Fading US-China trade optimism provided a goodish lift on Tuesday.
- Bulls lacked any strong conviction ahead of FOMC meeting minutes.
Gold was seen oscillating in a narrow trading band through the early European session on Wednesday and consolidated the overnight goodish move up back closer to weekly tops.
Renewed uncertainties surrounding the US-trade talks, together with negative Brexit headlines dented investors' appetite for riskier assets on Tuesday. The same was evident from a selloff in the US equity markets and provided a strong boost to traditional safe-haven assets - like Gold.
Reviving safe-haven demand supportive
The precious metal quickly reversed an early dip to multi-day lows and rallied back above the key $1500 psychological mark in reaction to the US decision to blacklist eight Chinese companies over the treatment of Muslim minorities in the western province of Xinjiang.
Meanwhile, a South China Morning Post report said on Tuesday that China had toned down expectations ahead of high-level trade talks between the two countries, starting this Thursday, and further added that the Chinese delegation could depart Washington a day earlier than scheduled.
The latest development threatened to derail already delicate trade negotiations and dampened the global risk sentiment. The global flight to safety was further reinforced by a sharp slide in the US Treasury bond yields, which further benefitted and drove flows towards the non-yielding yellow metal.
Meanwhile, a subdued US Dollar price action did little to influence the price action on Wednesday, though bulls lacked any strong conviction and seemed reluctant to place any aggressive bets ahead of the release of the minutes of the latest FOMC policy meeting held on September 17-18.
Ahead of the key event risk, a scheduled speech by the Fed Chair Jerome Powell will be looked upon for some short-term trading impetus later during the early North-American session, making it prudent to wait for a strong follow-through buying before positioning for any further near-term appreciating move.
Technical levels to watch