Gold prices dipped to early-October lows on Friday as investors were cheering a partial US-China trade deal. As a result, Washington decided not to raise tariffs on $250 billion worth of Chinese imports from 25% to 30%, which brought some relief to global markets. The bullion registered a weekly low just below the $1,474 figure and finished at $1,488 on Friday.
Today, the precious metal is making some recovery attempts, though the downside risks persist as long as the prices remain below the $1,500 handle. At the same time, investor optimism over the trade truce seems to be abating gradually, with risk sentiment has deteriorated already. It looks like investors prefer not to get over excited as there is a tough road ahead to the US-China trade negotiators to cut the deal, with key issues still not resolved.
Against this backdrop, the immediate downside risks for gold prices are limited at the moment, with rising bets for another rate cut by the Federal Reserve will likely support the bullion in the short term. Technically, the yellow metal needs to hold above the mentioned lows and get back above the $1,500 key barrier as soon as possible to avoid a more bearish scenario.
Today, the precious metal is making some recovery attempts, though the downside risks persist as long as the prices remain below the $1,500 handle. At the same time, investor optimism over the trade truce seems to be abating gradually, with risk sentiment has deteriorated already. It looks like investors prefer not to get over excited as there is a tough road ahead to the US-China trade negotiators to cut the deal, with key issues still not resolved.
Against this backdrop, the immediate downside risks for gold prices are limited at the moment, with rising bets for another rate cut by the Federal Reserve will likely support the bullion in the short term. Technically, the yellow metal needs to hold above the mentioned lows and get back above the $1,500 key barrier as soon as possible to avoid a more bearish scenario.